When it comes to borrowing money, trust is key. And that trust often starts with something called a money lender licence. This licence is like a stamp of approval from the government, an indication that the lender is legitimate. Knowing how to check a money lender licence can help you avoid money lender scams and illegal lenders. Let’s explore why money lender licences matter and how to verify their validity easily.
Why is it important for a lender to have a money lender licence?
Having a valid money lender licence is essential for any lender involved in the business of legal money lending. This licence signifies that the lender is authorised by the government to conduct legal money lending operations in Singapore. By extension, licensed money lenders in Singapore have to follow the many rules and regulations pertaining to licensed moneylending, which ensure the safety and security of borrowers like you and I from potential illegal threats and money lender harassment.
Is there a comprehensive list of all the licensed lenders in Singapore?
Yes, there is a comprehensive and regularly updated list of licensed lenders in Singapore. This list includes information on blacklisted money lenders whose licences have been suspended as well, if any.
Easy ways to check a money lender licence to ensure it’s credible
Ensuring the credibility of a money lender is essential to protect borrowers from fraudulent practices and unethical lending behaviours. Here are some ways on how to check a money lender licence’s credibility:
- Ensure the lender is on the Ministry of Law’s list: The first step to checking a money lender licence is to verify if the lender is listed on MinLaw’s official list of licensed lenders.
- Verify the details provided by the lender: Cross-check the licence number, landline number, and office address provided by the lender with the information available on MinLaw’s list.
- Visit the lender’s office for physical verification: Head down to the lender’s office and request to see their money lender licence. Ensure the details on the licence match those provided by MinLaw.
- Additional verification: Contact the Credit Association of Singapore (CAS) to confirm if the lender is a member. While being a CAS member is not a requirement for legal moneylending, it indicates a clear commitment to higher ethical standards.
Important things you should do other than checking the money lender licence’s validity
In addition to verifying the money lender licence, there are other steps you should take:
- Research the lender: Look for online reviews and gather feedback from friends, family, or colleagues who have borrowed from the money lender before. This can provide valuable insights into the lender’s reputation and service quality.
- Request non-obligatory loan quote: Ask for a loan quote that details how much you can borrow from the lender without any obligation to commit. This helps you understand the various terms and conditions offered.
- Ensure fair terms: Confirm the loan quote offered is fair and reasonable, ensuring that the money lender’s interest rates, admin fees, late interest rates, and late payment fees are within legal limits.
- Compare multiple quotes: Obtain loan quotes from multiple money lenders to compare and find the most suitable option for your needs. Comparing quotes helps you find the most favourable loan conditions.
Things that authorised lenders with valid money lender licences can and cannot do
Authorised lenders with valid money lender licences can:
- Legally offer a wide range of loans catered to personal and business needs, such as personal loans, business loans, renovation loans, wedding loans, bad credit loans, payday loans, monthly loans, and many more.
- Impose legally permitted interest rates, late interest rates, processing fees and other allowed charges.
- Provide clear and transparent loan terms. They are required to provide you with a contract and cannot change its terms and conditions without your consent.
- Offer repayment schedules that comply with Singapore law.
Authorised lenders with valid money lender licences cannot:
- Use abusive or threatening language to collect debts.
- Charge exorbitant interest rates (more than 4% monthly interest) or hidden fees. The most they can charge for late repayment is $60 per month of late repayment, along with a late interest rate cap of 4% monthly on overdue payments.
- Charge a processing fee or administrative fee that’s beyond 10% of the loan principal.
- Levy early repayment penalty fees.
- Retain personal identification documents like ICs or passports.
Don’t engage with a lender without a valid money lender licence
Be cautious of scammers and illegal lenders. Do not trust any lender who offers excuses for not being listed on MinLaw’s register of licensed lenders.
Unauthorised lenders may employ unethical practices, charge exorbitant fees, and use aggressive debt collection methods. Always prioritise your safety by dealing only with licensed lenders.
Conclusion: Stay safe and check for money lender licence legitimacy before borrowing
When facing an emergency that necessitates a loan, it’s essential to only borrow from legal and reputable lenders. Knowing how to check a money lender licence thoroughly is crucial in safeguarding your interests and safety.
Following the guidelines above will help ensure you engage with a credible money lender and protect your financial well-being. Remember, taking the time to verify a lender’s licence can save you from needless scams and legal troubles.
For a reliable and legal loan provider, consider applying for a loan with 1-Cash, a legitimate loan company in Singapore with a valid money lender licence. We’re known for our quick loan approval, flexible terms, transparent rates, and top-notch services!
