Reliable money lenders in Singapore have increased in number and have gained more trust from the public in recent years. They no longer have the reputation of being abusive and predatory, owing to new rules and regulations for this specific industry.
What that means for you is you can have more confidence approaching moneylenders for loans. Borrowing money is more straightforward and less stressful than before because of these five things.
Moneylenders are government-regulated
Money lenders in Singapore are regulated under the Ministry of Law (MinLaw). They must follow the rules and regulations set forth by the MinLaw, specifically the Moneylenders Act of 2008. The Act includes permitted and forbidden practises by moneylenders, as well as stringent requirements for licensing, lending, and asking repayments from borrowers.
The MinLaw’s regulations ensure fair practises by all licenced lenders. If your chosen moneylender has a valid licence, you can be sure that they will follow the rules under the Moneylenders Act. You can trust them, and their reputations are better than before. If lenders engage in dubious practices, they will face heavy fines.
Limits are set on interest rates
Under the Moneylenders Act, all lenders can charge a maximum of only 4% interest per month, regardless of the type of loan you apply for. This cap on the interest rate applies to all borrowers of any income level as well.
With this restriction, repaying your loans is not as hard. You can pay off your loans sooner and avoid losing too much money on interest payments. Also, the regulated interest rates will be less of a discouragement to take out a loan from moneylenders during those times when you really have to.
Transparency is required
Moneylenders in Singapore are required by law to disclose the terms of their loan products completely. That means interest rates, repayment terms, fees, and other charges. Before you take out a loan from a moneylender, you will know exactly how much you have to pay back on top of the principal.
They also must disclose monthly deadlines for repayment as well as how much you need to pay back every month. This way, you can find out if the loan is a good fit for your budget and current financial situation.
Harassment is not allowed
Moneylenders have had a bad reputation in the past for harassing their clients for repayment. Their tactics varied, from following people around from work or lingering near their homes. Constant barrages of calls are also common, causing untold distress to financially struggling borrowers.
Thanks to the provisions of the Moneylenders Act, methods that threaten or harass customers are no longer allowed. Any lender who still does that will be heavily fined, or worse, ordered to shut down permanently.
Instead, moneylenders can only use ethical means of communication to inform you of your dues. With that, you will not be further stressed with paying back your loan.
Approval is quick and easy
Moneylenders have faster approval processes than banks for loans. They still check your credit score and history, but they ask for much fewer documents than banks do. Your loan can also be approved in as fast as 30 minutes, depending on the lender and the kind of loan you apply for.
Singapore moneylenders have improved a lot today thanks to new regulations in force. You can rest easy when taking out loans from lenders, knowing that the interest rates will be fair and they will only use ethical methods to ask for repayment. The best thing about them is you can get your loan applications approved faster and more easily than most banks.