Irrespective of the kind or amount of loan you require, it is much better to approach a licensed moneylender than a loan shark. This is because the former offers many advantages. Often people who take a loan from an unlicensed lender have to face a lot of harassment. Surely, this is not something that you would want to deal with, especially when you have no intention of defaulting payments. By approaching a moneylender who’s licensed, you can ensure you don’t have to deal with such troubles. Here are some main advantages of choosing a moneylender who’s licensed over a loan shark.
Each and every moneylender who’s licensed in Singapore has to follow a set of rules and regulations, which are there to ensure fair play and protect borrowers from harassment. In case if the lender with a license breaks even one such rule, the borrower can approach the authorities, who will punish the lender heavily.
If the offense is serious, the lender’s license may also be revoked. Because money lenders who are licensed come under the realm of law pertaining to giving loans, they should treat their customers in a professional and appropriate manner.
However, illegal lenders don’t have to follow the rules and regulations which is why they often harass innocent borrowers.
The law dictates the maximum interest rate that lenders who are licensed can ask for. So when you approach such a lender, you have an idea of what’s the maximum interest rate you have to pay. Moreover, often if you can prove you present a low risk to the lender, you can get the loan at a rate considerably lower than the maximum.
Illegal money lenders, on the other hand, don’t even do a basic credit check that lenders with a license do. Neither are they bound by law to not charge over and above a certain mark. Therefore, they usually charge a hefty interest rate from borrowers, and the needier the borrower appears, the greater the interest rate.
Unlike illegal lenders, money lenders with a license cannot send ads through SMS to potential clients or do telemarketing.
Legitimate money lenders can offer you loan very quickly after you’ve submitted the required documents, in less than a couple of hours. This is another advantage offered by such money lenders. With illegitimate money lenders, one can’t be sure of how soon they will approve the loan.
Unlike illegitimate lenders, a licensed moneylender Singapore will carry out SingPass verification in front of the customer and will never try to sneakily obtain personal information of a customer.