In this article, we are going to talk about how to check if a moneylender is licensed or not in the market. Also, we are going to talk about how to see if you are dealing with a loan shark and how to verify the status of the lender.
How to check if you are dealing with a loan shark or licensed moneylender?
Moneylenders are the best alternative way to get a loan for yourself if you feel unsafe about the bank. That is because the banks are very expensive to take a loan from. Also, the period which a bank takes for a loan is very big that is from 4 – 5 years. While the moneylender has a short period of loan that is from 1 – 5 years.
We are going to tell you how to check licensed moneylender and also a loan shark. The loan sharks are also called Ah Long in the market or Singapore. They call them by this name as it means fraud or scammer in the Singapore language.
There are some ways how you can see if the moneylender you are taking a loan from is licensed. Also, some ways can easily help you determine whether they are frauds or Ah Long.
Things that tell us the moneylender is licensed
There are a lot of moneylenders in the Singapore market which makes it hard to believe any of them. So we are going to tell you below how to check if the moneylender you are dealing with is legal. Here is the list of thing which will tell if a lender is legal or not.
- The first thing is that you should check the details of the lender on the MinLaw website.
- This will tell you the name of the owner and the time it was created and registered.
- You can then cross-check the name of the owner and the number of registration to test them.
- Then you can also ask the people in the market about the reputation of the lender.
- There you will get relevant information about how many good and bad reviews they have got.
- This will help you to get a clear image of the lender from which you are taking a loan.
Things that tell us, moneylender, is illegal
Since there is a majority of lenders in the market you will have to see which is legal or illegal. This is important so that you do not get scammed by someone illegally and lose your money. Here is a list of things to help you see which lender is illegal in the market.
- They will contact you through email or SMS.
- They will use abusive language and will also try to threaten you into taking the loan.
- They will ask you for your SignPass user Id and password to check your account.
- They will keep the NIRC card and other documentation after the verification of the contract.
- They will pressurize you to sign a blank or empty note without any contract information.
- They will provide a loan without explaining terms and conditions and force you to sign immediately.
- They will approve your loan through the phone or SMS or email ID.
How to verify if a moneylender is still legal in the market?
You might have checked before of that lender but it is an extra security measure to check again. That is because you never know when they might have committed fraud and become illegal. You can check with the MinLaw website to see if the lender is still legal or not. These are the steps you can use to check the current status of a particular lender in the market.
- First thing is that you will have to open the MinLaw website official page.
- Then you will have to enter your account details and log into your account.
- Then you have to click on licensed moneylenders and click on the download PDF option.
- After the download is over you have to click on the open file option from the settings.
- Then the file will open and you will see the different information about various lenders.
- There you can check the status of legality of the lender you are using.
- You will have to include your name, address, and unique number, and also the date of joining.
- After you have checked all the things it will say at the last if they are legal or not.
What is the main difference between licensed and illegal moneylenders?
The main reason why people visit the moneylender is when they require an urgent loan. By urgent loan they mean to get a loan very quickly due to any kind of emergency. It can either be for medical use, educational use, planning something big like a wedding or vacation, etc. Here are some of the differences between legal and illegal moneylenders.
This means that all the legal license moneylenders will tell you about different details. They will tell you about the terms and conditions when they both meet face to face and will also explain you. Whereas unlicensed or illegal lenders will never tell you any terms or conditions on the contract.
- Interest rate
The legal lender is only allowed to take up to 4% interest on the loan amount. While the illegal lender will charge you more than 4% interest on your loan amount.
The legal lender cannot take more than $60 for repayment per month and only 10% as a fee for the registration of the loan amount. Whereas the illegal lenders will not follow these rules and charge you a huge amount of fees.
The legal lenders are only allowed to advertise by either printing articles in the newspaper or personally talking. While the illegal lender will try to advertise you by emailing you or by sending you an SMS.
- Loan amount
The legal lender is allowed to give a $3000 loan to those whose salary is below $20,000. Those above $20,000 can be given 6 times the amount of their annual income. Illegal lenders will give a very huge amount of loans which is unbelievable.