How to Avoid Loan Sharks and Unlicensed Moneylenders in Singapore?

Loan sharks and unlicensed moneylenders are good talkers who can offer you a deal that you cannot easily refuse. They are persistent, and they are using innovative ways to attract unwary customers who eventually result in becoming victims. These ways include advertising through social media, emails, SMS, and many others. While they make enticing offers, you have to remember that there are reported incidents of harassment that victims experience from unlicensed moneylenders and loan sharks.

Thus, even if you are in dire need of financial assistance, you must never make a transaction with loan sharks and unlicensed moneylenders. Yes, loan sharks and unlicensed moneylenders offer easy and fast transactions, but these transactions have no legal precedents. There are moneylending laws in Singapore to protect borrowers from bad moneylending practices. By transacting with loan sharks and unlicensed moneylenders, you risk losing your protection against them.

Why do people still transact with loan sharks and unlicensed moneylenders?

One of the main reasons why people choose loan sharks and unlicensed moneylenders over registered moneylenders and banks is that they are desperately in need of financial assistance. These borrowers may not have been able to get a loan from reputable sources, which forces them to seek assistance from questionable sources. These kinds of situations are where loan sharks and unlicensed moneylenders thrive. They present a helping hand to borrowers who may or may not know that they can be in a debt trap.

How to spot loan sharks and unlicensed moneylenders?

As mentioned, loan sharks and unlicensed moneylenders are good talkers who can offer easier and faster transactions. They can offer you an amount regardless of your salary or income. However, the amount that they will offer has a high-interest rate that is not compliant with the law. For you to spot loan sharks and unlicensed moneylenders, here are some tips to help you.

— The person or company offers you a loan without requiring any contract signing or any form of legal documents.

— They may withhold any form of identification from you.

— They send you emails, SMS, flyers or any form of advertisements that are not allowed by law.

— They have no physical or business address.

— The company cannot be found under the Registry of Moneylenders in Singapore.

— The amount that they will offer you may be beyond what your salary can cope with.

— The person or company fails to explain the terms and conditions of your loan fully.

— They engage in practices that is not allowed by the Government of Singapore.

Disadvantages of making a loan with loan sharks and unlicensed moneylenders

To help convince you, here are some reasons as to why you should not make any form of transaction with loan sharks and moneylenders.

— Loan sharks and unlicensed moneylenders will harass you, your family and neighbors if you fail to make any form of payment.

— Your principal loan will balloon to a huge amount because of high interest rates, charges and fees.

— They may take any form of collateral or any item that is important to you.

— You cannot easily settle your debt because of the hidden charges and interest rates.

— Harassment may lead to violence and traumatic experiences for you and your family.

Know the law

If you need a loan, remember to make a transaction with banks and licensed moneylenders only. If you choose the latter, then check the Registry of Moneylenders in Singapore if the name of the company is there. You can find the list of licensed moneylenders on the website of the Registry of Moneylenders.

However, for you to know if you are dealing with a licensed moneylender, here are the guidelines that moneylenders need to follow.

— The maximum interest rate that moneylenders can charge you is 4%.

— They can only deduct charges and expenses if a loan is successfully made.

— They are not allowed to make threats and use abusive language.

— Moneylenders are not allowed to ask for your SingPass user ID and password.

— No NRIC card or any form of ID should be retained.

— They should explain the terms and conditions of the contract.

— The Note of Contract should be complete. If it is not, then the moneylender should not ask you to sign it.

— The loan should be only be approved if the moneylender has exercised due diligence.

— They are not allowed to hold your principal amount either in whole or in parts for any reason.

— They can only advertise through websites owned by the moneylender, printed or online business directories, or through advertisements posted on the moneylender’s business premises.

If the moneylender is licensed and has violated any of these, then you can contact the Registry at telephone number: 1800-2255-529.

What to do with loan sharks and unlicensed moneylenders?

If you happen to encounter a loan shark or an unlicensed moneylender, you should avoid any form of transaction with them. Do not trust them or listen to the offers that they will give you. They will exploit your desperation for financial assistance but do keep in mind that making a loan with them can lead to more problems than solutions. If you or someone you know has encountered these types of people or companies, it is best to contact the police.

Seek professional help

There are many reasons why people need financial assistance. One reason is that they have many expenses that they are shouldering. Another reason is that they have a gambling problem. These kinds of reasons lead to financial desperation, which loan sharks and unlicensed moneylenders will exploit. To help you manage these kinds of problems, you can contact different organizations and financial advisers to help you.

LOOKING FOR A LOAN?

Are you in need for a loan? If you are, then click this link: Instant Loan. The website provides you with a list of banks and licensed moneylenders based on customer reviews and can match your financial need to the right moneylender. The website can help you avoid loan sharks and unlicensed moneylenders who want to take advantage of you.