What is the distinction between mortgage sharks and licensed backers ?, Cash Information

Licensed moneylenders in Singapore are not the same as loan sharks. They are regulated by the register of moneylenders and are not allowed to do many of the things that loan sharks do.

Did you know that Singapore moneylenders are not all created equal? There are stark differences between loan sharks and licensed financiers, although both of them offer loans to those who seek them.

Those blood-red O $ P $ messages that were sprayed on walls? This is the job of loan sharks and their runners, not licensed financiers.

Learn how to differentiate between loan sharks and licensed backers and stay on the right side of the law even when you are in dire need of cash but aren’t sure what your options are.

Loan sharks

We have loan sharks – the reckless, unlicensed “ah longs” who operate illegally and use crippling methods of harassment, such as naming and shaming debtors publicly on the internet, spraying paint on debtors’ doors, destroying the characteristics of debtors, Pour industrial glue into the debtor. Locks masquerading as home notification enforcers and more.

Here are the top things you need to know about loan sharks in Singapore:

• Masquerade as a licensed moneylender
• Send annoying unwanted spam messages via SMS, WhatsApp, flyers, emails and social media platforms and make cold calls
• Astronomical Interest Rates – remember: a sky-high weekly interest rate of 50 percent, which equates to a daily interest rate of about 7.1 percent
• Inquire about loan processing and / or administration fee prior to loan approval
• You are unlikely to have a business address
• Can approve and pay off loans without a face-to-face meeting
• May provide loans to borrowers without evaluating borrowers’ financial standing and income
• Do not offer a loan agreement, incomplete contract, or a clear explanation of loan terms
• Use all kinds of harassment methods and even violence to get debtors to pay
• Track debtors, debtor guarantors, and even neighbors

Loan sharks and their runners are certainly intimidating. However, this does not mean that we cannot help the police in their ongoing efforts to curb illegal, unlicensed money lending activities in Singapore. Unlicensed money lending remains a widespread problem in Singapore.

The police are calling on everyone to report any credit parking activity and anyone suspicious in our neighborhood. The more detailed the descriptions, the better. Call the police at 999 or the X-Ah Long hotline at 1800-924-5664.

ALSO READ: “I’ve never borrowed money from loan sharks”: Over 20 delivery drivers appear at residents’ doors when they suspect harassment

Licensed moneylenders

Licensed Moneylenders are registered and regulated by the Moneylender Register, which is parked at the Department of Justice. They are legal moneylenders available to borrowers.

If you are considering getting help from loan sharks or licensed financiers, it is obvious which one is the smarter choice.

Here are the most important things you need to know about licensed moneylenders in Singapore:

• They may only advertise on their own websites, on their business premises, or in business or consumer directories. They cannot offer their services through social media platforms, text messages, WhatsApp, phone calls, etc.
• The maximum interest rate is limited to four percent per month
• The maximum amount a borrower can borrow without collateral is 6 times the borrower’s monthly income if they earn at least $ 20,000 per year (applicable to Singaporeans, PRs, and foreigners).
• The maximum late fee is capped at $ 60 for each month of late repayment
• The maximum processing and / or administration fee is limited to 10 percent of the loan capital at the time the loan is granted. This is usually deducted from the principal loan amount paid out to the borrower
• It is not permitted to trick borrowers into making payments to ensure the loan is paid off
• It is not permitted to remotely approve and withdraw loans. Physical personal verification of the borrower’s identity is required
• Assessment of the financial standing of the borrowers is required
• Go through the loan terms in person after approving the borrower’s loan application
• The loan agreement must be signed and the loan withdrawn in person at the registered business address of the licensed financier
• Most licensed moneylenders offer flexible repayment plans. Therefore, consider your income and financial obligations very carefully before entering into the loan agreement

As the avid consumer, check the list of licensed moneylenders with valid licenses in Singapore before proceeding. Note that the listings are subject to change. Each moneylender whose license has been suspended is listed separately.

Browse through various funders to find the one with the most favorable terms that suits your needs. Remember, borrowers are required by law to fulfill the loan agreement they have signed with a licensed moneylender.

ALSO READ: “We’re Really Unlucky”: Jurong moneylender was robbed twice in 5 months

Seek legitimate help

Getting help from loan sharks is not the way to go even if you are faced with money problems. The effects on you and your family can be dire!

While it can be difficult or even embarrassing to ask, try to get help from loved ones and close friends first. Also consider alternatives such as financial systems offered by the various government agencies.

In addition to borrowing from licensed financiers, you can also consider personal loans and debt consolidation plans that banks offer if you qualify for such credit facilities. While easier said than done, it is important to prioritize deleveraging if you are currently in debt!

This article was first published on SingSaver.com.sg.