There will be moments, especially when a problem arises from the surface that we will all need to borrow money from time to time. Given the situation, we often look for moneylenders for an easier, more convenient alternative to borrowing money from a certain bank. It is true though that licensed moneylenders can be a life-saver when you are in times where you need to borrow quick money, what if you came across a loan shark trying to disguise as a legit moneylender? Here are tips we got for you to identify and distinguish the difference between a licensed moneylender and a loan shark if you are seeking credit from a lender.
- Licensed moneylenders will explain to you the terms of the loan you are applying for in a language you can understand. Law in some countries like Singapore, states that licensed moneylenders singapore should explain to you the terms of your loan in a language that you can understand well. The terms explained include answering any questions you may have about your loan as well as of the loan’s interest rate, payment method options, and the repayment period. If you come across a lender who hands you a contract and refuses to explain the terms you need to know in English, RUN!
- Licensed moneylenders set unsecured loan amounts depending on the range of your income. For unsecured loans, a law in Singapore states that large amounts of a certain loan applied for should get based on the loaner’s personal income. If you ever happen to speak with a lender who offers an unusual amount (even higher than what is being allowed), then take that as a warning sign since you may be dealing with a loan shark.
- Licensed moneylenders will always prepare a contract for you to sign. Licensed moneylenders are being required by the law to have their clients sign a contract for the loans they apply for. These contracts are being written by a lawyer and must include details such as Interest Rate, Late Payment Fees, Repayment Period, and other necessary pieces of information. If you happen to talk to someone who offers you to loan money without a contract or ask you to sign a blank or incomplete contract, DO NOT ACCEPT THE OFFER!
- Licensed moneylender only charges you with three (3) types of fees. With Singapore law, a moneylender should only charge three types of fees aside from your loan’s interest, these fees type include up-front service fees, legal fees from a court challenge, and late payment fees. If you come across someone who charges above these maximums then it is obvious that you are about to deal with a loan shark.
If you know your rights when it comes to borrowing money, then you will get taken away from crucial situations for your financial safety. With the right knowledge, you will not be a prey of loan sharks and you will make good decisions.