Unexpected expenses happen to everyone. However, not everyone has a well-cushioned savings account or an emergency fund. As a result, you may need a personal loan. If you choose not to take out a personal loan from the bank, another option is to get a loan from a licensed money lender. Here is our recommended list.
What is a money lender?
A money lender is a person or organization whose business is to lend money to others, which is paid back at a higher interest rate. Their interest rates are often higher than a bank’s because the borrower usually has a higher risk of defaulting. As a result, a bank may choose not to lend money to the borrower.
Fortunately, money lenders do not look at your credit history. Instead, they use the Moneylender Credit Bureau, which provides them with up-to-date details of the applicant’s creditworthiness and indebtedness. They derive this evaluation from data about your previous unsecured loans with other licensed moneylenders. Money lenders are known for offering fast processing, usually within 24 hours, simple eligibility requirements, and some even offer debt consolidation. Unlike a bank, their employment requirement is not as strict. You mainly need to be employed for at least 3 months and demonstrate a steady source of income.
Why choose a licensed money lender?
A licensed moneylender is a legal way to get fast cash. The term “licensed” means that they have been approved by the Ministry of Law (MinLaw) and have a registration number issued by the Monetary Authority of Singapore (MAS). Always double check your moneylenders' information against the Ministry of Law’s database. Some moneylenders have been known to falsify their registration number in an attempt to make their business appear legitimate.
Working with a legitimately licensed moneylender is more secure. Because they must comply with the Registry of Moneylenders in Singapore, you can be confident that you won’t be scammed by them. Furthermore, since they are a legitimate business, they want their clients to be successful. You can always consult someone and get an immediate response. They often offer advisory information and guidance to make the process of loan application, paperwork, and payment easier for you. Finally, the most important reason to choose a licensed money lender is because they abide by the standards and policies set by authorities in Singapore. There is a cap that moneylenders can put on interest rates. As a result, they often have competitive rates with a reasonable repayment schedule.
A1 Credit has been in business since 2009. They offer a variety of loans, such as personal loans, payday loans, foreigner loans, and business loans. At the time this article was written, they had 116 reviews on Google with an average of 4.9 out of 5 stars. They were featured on Singapore’s Outstanding Enterprise and rated one of Loan Advisor’s Top 10 Licensed Money Lenders 2018. They boast of fast cash, low-interest rates, and confidentiality. However, they don’t cut corners. They have strong lending criteria and have a strict protocol for accessing individual portfolio risks to make sure that each client is successful with their short-term loan. I also appreciate that you can apply online, on the phone, or in-person.
365 Credit Solutions
365 Credit Solutions has been in business since 2010. They also offer a variety of loans. At the time this article was written, they had 141 reviews on Google with an average of 5 out of 5 stars. They were featured on Singapore’s Outstanding Enterprise 2016/2017 and rated one of Loan Advisor’s Top 10 Licensed Money Lenders 2018. They boast that your loans are processed within one hour. I appreciate that they show you the repayment amount upfront and in detail. There are no hidden fees.
GM Creditz has been in business since 2010. They offer personal loans, payday loans, bridging loans, foreigner loans, and business loans. At the time this article was written, they had 148 reviews on Google with an average of 4.9 out of 5 stars. They were rated one of Loan Advisor’s Top 10 Licensed Money Lenders 2018. Their website is a bit outdated, but their information is very upfront. Interestingly, GM Creditz performs traditional credit checks and verifies applicant information via both national databases and manual review. Nonetheless, they boast high approval rates and cash within one hour.
Bugis Credit has been a licensed moneylender since 2007. Despite being around for over a decade, they only have 80 reviews on Google. However, their rating is still 5 out of 5 stars. This is partly due to the fact that they were featured on Singapore’s Outstanding Enterprise 2014 and rated one of Loan Advisor’s Top 10 Licensed Money Lenders 2018. This company focuses on customer service and aligns itself with Singapore’s Moneylending Law and Regulations.
Advance Planners Credit
Advance Planners Credit has been in business since 2010. At the time this article was written, they had 121 reviews on Google with an average of 4.9 out of 5 stars. They were rated top 5 of Loan Advisor’s Top 10 Licensed Money Lenders 2018. As with these top moneylenders, your loan application will be approved within one working hour and boast about low-interest rates. They do not transfer the money to your bank account, but instead, offer cash from their office. I also enjoy the financial articles that they have released to help educate the public about debt and loan applications.
Licensed moneylenders are not allowed to solicit for loans via text messages or phone calls. Therefore, never give out any of your information or continue the call. It is an unlicensed moneylender.
Be familiar with the fees and interest rates that licensed moneylenders can charge. They are restricted from going beyond what the Ministry of Law has dictated. For example, the maximum interest rate moneylenders can charge is 4% per month and they cannot impose a fee of more than S$60 for a late repayment.
Do not accept weekly loans under a supposed and false “new law.” When borrowers fail to repay the debt, they face a 10% upfront administrative fee to “re-contract,” in addition to late payment fees. Some moneylenders have also tried to exploit borrowers by introducing “split loans” and short-term loans of less than one month.
Finally, under the Moneylenders Act, licensed moneylenders are required to inform borrowers of the terms and conditions of the loan, including how interest and fees are calculated and when they are charged. If they fail to do this, they will be guilty of an offense. If convicted, the moneylender will face a fine, not exceeding S$20,000, imprisonment for a term not exceeding 6 months, or both.
Even though you may be desperate for cash, you have rights. If the interest charged by the moneylender is excessive or if the transaction is substantially unfair, the borrower can apply to the court to ask for relief. If needed, consult a debt recovery lawyer to pursue this action.
Taking out a loan, even a short term loan, is a serious commitment. It is common knowledge to avoid loan sharks at all costs. If you are truly in need of cash, see a licensed moneylender instead. The Ministry of Law has set up regulations to help protect the consumer and provide them with a safe and quick cash loan. However, all moneylenders are businesses and are unique. Research their policies, terms and conditions, and other customers’ reviews before signing the contract. As always, make sure you can afford the monthly payment. A short-term personal loan can be a lifesaver but only if used correctly.