Licensed moneylenders are commonly seen as they sprout across the country, knocking on your neighbors’ doors and being seen in all heartland neighborhoods.
In this article, we asked Credit Bureau Singapore about the different types of moneylenders, how to tell licensed from unlicensed, and how borrowing from licensed moneylenders affects you.
We do not encourage excessive borrowing. However, if you need to borrow money from moneylenders, do it properly and safely with our guide.
What are Licensed Moneylenders?
There is actually a Moneylenders Registry under the Ministry of Justice which oversees the registration and regulation of moneylenders in Singapore.
The purpose of this very special registry is to cultivate a safe and professional money lending industry.
The Moneylenders Act defines a licensed moneylender as a person, whether principal or agent, authorized by license to carry on the moneylending business in Singapore. Any person, with the exception of exempt moneylenders, is presumed to lend an amount of money in return for a larger amount.
Where can I find licensed moneylenders?
Do not reply to these credit sms or telegram messages with free money scam. Instead, check out this list of money lenders licensed by the Department of Justice here.
There are currently 153 licensed moneylenders in Singapore, including:
- Accreditation Pte. Limited
- Credit King Pte. GmbH.
- Ez Loan Pte. GmbH.
- Fast Money Pte. GmbH.
- Golden Credit (S) Pte. GmbH.
- Happy Cash Pte. GmbH.
- I-Credit Pte. GmbH.
- JD Credit Pte. GmbH.
- Karthik Money Lending Pte. GmbH.
- Lending Bee Pte. GmbH.
- Max Credit Pte. GmbH.
- Orange Credit Pte. GmbH.
- Prosper Credit Pte. GmbH.
- Quick Credit Pte. GmbH.
- and more…
You’re better off with one of these licensed moneylenders than with an unlicensed… species of fish.
How to borrow money from licensed moneylenders?
Now that you know how to check which moneylender is licensed, visit their website for rates and terms.
Licensed moneylenders are allowed to advertise their products on their own websites.
However, licensed moneylenders are not allowed to advertise via SMS or social media. If they’re on social media, stay away – they’re either unlicensed or flouting the rules.
Finally, make sure the money lenders make an in-person appointment at their registered office address here. Online borrowing is not allowed. Most likely, the licensed moneylender will ask you to go to the Credit Bureau Singapore and also pay for a credit score report.
Difference between licensed and unlicensed moneylenders
According to the Moneylenders Credit Bureau, here are the 4 main differences between licensed and unlicensed moneylenders to look out for:
- Licensed moneylenders may advertise only through business or consumer directories (in print or online media), moneylender websites, and advertisements placed inside or outside the moneylender’s premises.
- Promotional channels such as text messages, phone calls, social media platforms, flyers, emails or any other form of advertising are either from licensed moneylenders who are breaking the rules or unlicensed moneylenders*.
- Approved moneylenders are also required to meet the borrower in person at the approved place of business to verify their identity face-to-face before granting a loan.
- A credit transaction conducted entirely online and at locations other than the Approved Offices is not permitted.
But since there are banks, why would anyone borrow money from licensed moneylenders?
Reasons why Singaporeans borrow money from licensed moneylenders
Banks and their personal loans may have been your first choice. However, some of us may have maxed out our unsecured borrowing limit with the banks.
In addition, licensed moneylenders offer different types of loans compared to the banks. They also have different repayment schemes and interest schedules.
For example, a payday loan pictured above on Cash Mart’s website is usually repaid the following month with no interest charged. However, there is an administration fee of 10 percent of the principal loan amount.
Other licensed moneylenders such as 118 Credit also offer a wider range of credit products such as: B. Fast Urgent Cash. Which brings us to the next point.
The decision to borrow from a bank or licensed moneylender can also depend on various factors such as:
- Urgency of funds (banks usually take a few business days, plus they do not operate on weekends)
- repayment term
- loan amount
- Interest charges
Because retail banks and licensed moneylenders have different risk appetites, they operate under different lending policies. For example, their risk assessment regarding salary, loan terms, and repayment history may be more relaxed at licensed moneylenders.
Expect a higher interest rate or higher management fee when borrowing from a licensed moneylender in exchange for a faster processing time and looser credit criteria.
Assess your ability to repay and keep monthly repayments within a comfortable range to avoid a bad repayment record on your credit report and/or credit report!
7 Things You Should Know Before Borrowing From Licensed Money Lenders
Should you decide to borrow money from licensed moneylenders, you need to know the following:
- Make sure the lender is providing you with the correct principal amount of the loan. The advance credit approval fee is limited to 10 percent of the principal amount.
- Pay the loan installments on time to avoid late payment interest and additional late payment interest.
- The lender must provide you with a receipt for each repayment of your loan. Check that they are correct (e.g. name, amount, date).
- Make sure you receive a bank statement for all your loan(s) at least once in January and July and check it for accuracy (e.g. name, amount, date); and
- Keep all bank statements and payment slips as documentation and proof of payment.
- All moneylenders are allowed to charge a fee of no more than $60 for each month of late repayment.
- All moneylenders are permitted to seek court-ordered legal costs for the moneylender’s successful claim for recovery of the loan.
All of your records of borrowing from licensed moneylenders are then consolidated by the Moneylenders Credit Bureau. If you’ve lost track of the lenders you’ve been to or need to check your repayment history at licensed lenders, you can get a copy of your credit information report for $0.50 at www.mlcb.com.sg.
If you encounter unlicensed money lending activity, report it to the police hotline at 1800-255-0000 or submit the information online at www.police.gov.sg/iwitness. Members of the public can also call the National Crime Prevention Council’s X-Ah Long hotline at 1800-924-5664.