When the need to obtain a financial loan arises, it is essential for you to engage only with money lenders who are licensed. While it may seem like a better idea at first, taking up loans from unauthorised or illegal sources creates many problems like unfair terms of loan or harassment that can be avoided.
Below are some reasons why engaging a licensed money lender is the right choice.
It is not uncommon for illegal money lenders to engage in harassments of their clients, no matter if the debt has been paid or not. Taking money from legal lenders can give you protection against such harassments which brings about serious security risks for both you, your family and the people around you. It is compulsory for licensed money lenders to abide by strict laws established by the government. In the case where a lender fails to observe any of those rules, they will be subjected to penalties like the revocation of their license or monetary fines. Hence, you can be reassured that under any circumstances, you will not face the issue of harassments.
As of October 2005, licensed money lenders under the Registry of Moneylenders are only allowed to charge a maximum interest rate of 4% per month, unlike unlicensed entities where they are at the liberty to not only charge unreasonable interest rates but also change them at their will. This protects you from falling into any financial traps of incurring excessive interest fees or miscellaneous fees that you may be incapable of paying.
Under the law by the Personal Data Protection Commission(PDPC), licensed money lenders are not authorised to deliver any advertisements or campaign via telemarketing or SMSes to encourage money lending. This protects you from receiving SMS spams that are often used by illegal money lenders to attract potential borrowers.
There have been instances where unlicensed money lenders have unethically used SingPass login details of their customers to retrieve personal information for undesirable purposes.
To ensure the security of personal data, licensed money lenders are only allowed to conduct verification checks of a customer’s SingPass information when the loaner is present in the office where the verification is processed. Hence, you will be fully aware of how your SingPass details are being utilized and reduce your risk of personal data loss.
Licensed money lenders can offer loans at a faster rate as compared to unlicensed money lenders. This is especially so for people with a yearly income of $30000 or more as they will be subjected to faster and easier approval.
If you earn a yearly income of $30000 or more, you will be entitled to take up a loan of up to 4 times the amount of your monthly income. Moreover, the applicable rate of interest for you will be at a flat rate of 4% per month.
Borrowing a large sum of money is a serious commitment to make. By engaging licensed money lenders, you will be assured a secured borrowing process as well as receive professional advice on what matches your financial needs. By making a smart choice of your money lender, you will be reducing not only your financial risks but the mental pressure you carry with your loan.