How To Check A Money Lender License

The introduction of the Moneylenders Act in 2008 was a great move to protect borrowers and licensed money lenders in Singapore.

The Act makes it easy for borrowers to know if they are dealing with an entity that is allowed to conduct a moneylending business by specifying what licensed money lenders can and cannot do. It also ensures that everyone in the moneylending business possesses a money lender license.

This is why it is crucial to know how to check money lender license in Singapore before engaging in any business with a lender.

This ensures you address your financial needs safely and legally. Thankfully, confirming if a money lender is legally allowed to lend money in Singapore is quite a straightforward process.

In this article, we will tell you how to check money lender license, and what a licensed money lender can or cannot do when it comes to moneylending.

How To Check Money Lender License

The Ministry of Law ensures every money lender who has met the required conditions is granted a money lender license. Such lenders are included in the list of licensed money lenders in Singapore, which is available on the Ministry of Law’s website.

As a borrower, the first thing you should do is to identify whether you’re dealing with a licensed or unlicensed money lender.

So check the list of licensed money lenders in Singapore to see if your money lender is on the list. All its details, including its license number, should match what is stated in the list.

If it’s not on the list or the details are different in any way, do not work with the money lender.

Another way on how to check money lender license would be to visit the money lender’s office. If it is a licensed lender, its moneylending license should be displayed prominently in its office. This license number will also be visible on its website.

Be careful of money lenders that tell you they can’t meet you in person or turn down your request to meet at their office – they are most likely loan sharks.

In Singapore, the granting of new money lender licenses has been temporarily suspended. To prevent Singaporeans from falling victim to loan sharks, no moneylending businesses can operate in Singapore unless:

• It is run by an authorised person who holds a license.
• The business is run by an excluded or exempt money lender.

Those who do not fall under these categories are not allowed to lend money in Singapore.

With so many restrictions in place, loan sharks try all they can to manipulate customers to get loans with them. As they were granted by unlicensed lenders, such loans are unenforceable and may be hard to recover under a court of law.

All in all, you need to do more than knowing how to check money lender license. For your own safety and protection as a borrower, you should know what a licensed money lender cannot do, as well as what unlicensed money lenders may resort to.

What Licensed Money Lenders Cannot Do

We can’t emphasise enough how important it is to know how to identify an unlicensed money lender. So knowing what a licensed money lender can’t do is a good start.

Below are five things a licensed money lender cannot do in Singapore:

1. Grant loans without explaining the terms and conditions of the loan contract: Licensed money lenders must explain the terms and conditions of the loan contract to a borrower in a language he or she can understand.

2. Charged interest charges and fees beyond what is allowed: A licensed money lender cannot charge you more than 4% interest per month. If you fail to repay on time, you can only be charged a late interest of not more than 4%. It also cannot charge you a late fee of more than $60 per month. Its processing fee cannot exceed 10% of the loan amount upon loan approval.

3. Send unsolicited advertisements: The Moneylenders Act in Singapore has restrictions on how legal money lenders can advertise. They are not allowed to use SMS, WhatsApp, emails or flyers to get new borrowers.

Licensed money lenders are only allowed to use:

• Their own websites
• Business or consumer directories
• Advertisements placed on their work premises

4. Remote loan approval and disbursement: Even if you applied for a loan online, the law requires you to visit a licensed money lender’s business premises for identity verification before signing the loan contract. Loans cannot be 100% approved and disbursed online.

5. Harassment: It’s common for unlicensed money lenders to harass their customers, especially when demanding payments.

What UnLicensed Money Lenders May Do

Anyone can fall into a loan scammer’s trap. Many Singaporeans have been victims and you may not be an exception. Luckily, there are many ways on how to detect an unlicensed money lender from their tactics, as we will see later.

If you find out a money lender shows the following behaviours, this indicates it is not licensed. For example, an unlicensed money lender in Singapore will:

• Sell loans aggressively
• Allow you to take on a loan without getting information about the amount you want to borrow, your annual income, and the purpose of the loan.
• Fail to answer all queries or try to dodge queries of prospective customers regarding the terms and conditions of the loan agreement
• Give false or misleading information
• Advertise its business in other ways than what is allowed under the Act, including:

• • • Phone calls
    • SMS
    • WhatsApp
    • Website pop-up ads
    • Television ads
    • Fake websites
    • Emails

Licensed money lenders have to abide by limitations on advertising. The Act states that they can only advertise through business or consumer directories, at their business premises, and on their own websites. Such websites should not contain keywords related to gambling. They can also use print or online media within their approved place of business.

• Harass or threaten you or your family members after you decline the offer or you fail to repay the money. A licensed money lender is always professional in its dealings.
• Vandalise, damage or take your assets. Only loan sharks splash paint, put up posters and banners, and do other nasty things if you default on payment. A licensed money lender can only take your assets with a Writ of Seizure and Sale.

If a licensed money lender violates the law, you can lodge a complaint with the Registry of Moneylenders in Singapore.

You will be in a better position to do so if you know the common tactics used by unlicensed money lenders.

Deception Tactics Used By Unlicensed Money Lenders

Unlicensed money lenders may not necessarily use force. But they have a unique way of applying aggressive sales tactics to manipulate borrowers into falling into their traps easily. So they may:

• Avoid in-person meetings
• Ask for your Singpass ID or password
• Call you, promising better terms and conditions for getting funds
• Provide you with the loan without any copy of the contract
• Request for a mandatory processing fee before it grants you the loan.
• Mislead you into signing a blank contract
• Draw up vague terms and conditions in the loan contract
• Use abusive language and intimidation to trap you into a vicious debt cycle of debts or paying back the loans

In case any of the above happens, you can call Registry at 1800-2255-529 or file an online complaint to the Registry of Moneylenders.

Once you learn to spot an unlicensed money lender, you stand a better chance of getting funds from a verified source.

If you have decided to move on with a licensed money lender, here are some of the factors you may need to know.

How Money Lenders Apply For Their Licenses

A money lender has to do a test to get a license. The Registry of Moneylenders provides a link that those who are interested can pay for and do the test.

The tests are conducted to ensure they only get qualified money lenders. Without a license, no one can carry out a moneylending business in Singapore unless it is an exempt or excluded money lender.

Criteria For Excluded Money Lenders

Excluded money lenders can lend money to limited liability partnerships and corporations. They are allowed to carry out moneylending business under a law other than the Moneylenders Act. For instance, there are pawnbrokers governed by the Pawnbrokers Act.

They are not required by the law to have a moneylending license. Nevertheless, because the granting of new licenses has temporarily been suspended in Singapore, no one can apply for a license.

But you can still get loans from established licensed money lenders.

Once you have checked whether a money lender has a license, take another step further to confirm whether the license has been updated or renewed.

Updating Or Renewal Of The Money Lender’s License

A moneylending license is granted for one year. It needs to be renewed one month before its expiry date. The Registry has the power to approve or decline a renewal.

Again, if a licensee decides not to renew its license, it should inform the Registry of its intention one month before the license expires.

Applicants may decline the renewal if they were convicted of an offense, carried the business in a manner unfit for one who holds a license, are not residing in Singapore, and more.

A licensee can also update the particulars of its moneylending business if there was a change of business address or contact details.

Choose A Licensed Money Lender For Your Loan

Despite measures in place that protect both borrowers and money lenders, there will always be unlicensed money lenders in Singapore. This is why you must know how to check money lender license.

If you’re thinking of getting a loan, don’t fall into the trap of unlicensed money lenders. One best way is to check the list of licensed money lenders in Singapore.

Once a loan is granted, you must repay your loan on time every month.

If you need a loan now, you can consider approaching 1AP Capital today. We are one of the most reliable licensed money lenders in Singapore, offering some of the most affordable interest rates and no hidden fees.

Get help from our friendly loan officers or get started by applying for a loan now.