Singapore is a home to numerous legal money lenders that provide legitimate lending services for those who need financial assistance. Contrary to what some people say, loan sharks are not the only ones that exist in the country although a relatively high share of them can indeed be found here.
Legal money lenders are far from being similar to loan sharks. Most of the negative connotations about money lenders come from baseless generalisations and myths. For this reason, it is important to clarify all the erroneous information about money lending in the country.
Continue reading on to learn some of the major misconceptions about money lenders in Singapore and the truths behind them.
Misconception 1: Money lenders are illegal
As mentioned, licensed money lenders are often mistaken to be the same entities as loan sharks – persons or groups that lend money at extremely high interest rates. However, far from being the same as these illegal organisations, licensed money lenders are actually legal and trustworthy.
Legal money lenders in Singapore are monitored by lawful ministries and are governed by rules and regulations that require them to maintain credibility with their clients. Finding a legal money lender is actually quite easy. The website of the Ministry of Law (MinLaw) or Registry of Moneylender has a list of all the licensed moneylenders you can approach for reliable loans.
Misconception 2: Money lenders are predatory
Many people are hesitant to borrow money from money lenders because of the common misconception that they offer unreasonably high interest rates and impose hidden fees. These are probably the most misjudged myths surrounding licensed money lenders.
Contrary to being predatory, money lenders are actually helpful and reliable. Their interest rates are regulated by the Singapore law and are regularly audited to prevent unfair increases in prices. As a rule, they can only charge a maximum interest of 4% per month. Moreover, they also usually perform various paperwork and share cost breakdowns to their borrowers, so that the latter can go through all the charges before collecting their loan.
Misconception 3: Money lenders offer personal loans only
Personal loans are the most popular type of loan offered by many money lenders. However, the authorised money lenders in Singapore are not limited to offering personal loans only. Some are approved debt consolidation companies while others offer foreigner loans. They are able to provide all types of loans that are necessary for all kinds of situations and needs – such as business loans, debt consolidation loans, and payday loans.
Licensed money lenders essentially offer both secured and unsecured loans. A secured loan is where you can use your high-value properties as collateral in case you default or fail to make payments on time. An unsecured loan, on the other hand, is usually a small, short-term financing with high interest rates; this is where personal loans belong to.
Misconception 4: Loans from money lenders have a higher risk than bank loans
Many people believe that banks are the only ones that can provide financial reprieve for borrowers. This is one of the most outstanding misconceptions in Singapore when it comes to loans. In contrast to this myth, however, locals and foreigners in the country can totally rely on money lenders for money whenever they fall short of budget and need an instant cash loan.
Just like banks, licensed money lenders are also a dependable source of friendly loans. If you have bad credit, it is even more recommended for you to work with money lenders, so that you can recover your scores. Compared to banks that usually look for good credit, money lenders will approve your loan even if you have a poor credit score; they can even provide you with debt consolidation services.
There is widespread misinformation about money lenders in Singapore – these myths deter many people from approaching a money lender even if they are in dire need of financial assistance. However, contrary to common misconceptions, licensed money lenders are perfectly legal, reliable, and helpful. Knowing the right information about them is the key to enjoying the great benefits of private money lending.