Tips to Identify Legal Licensed Money Lenders VS Illegal Money Lenders
When choosing a moneylender for your financial concerns, it is very important that you deal with one offering a legitimate and reliable level of service. This is why it makes perfect sense to check the background of moneylenders you are looking to consult for your needs since not everyone can meet your standards and needs. There are now some moneylenders known for their false and misleading advertising while others are notorious for their malpractice. Thus, you have to be smart and well-informed during your search for a reputable moneylender in Singapore to spare yourself from further problems.
Here are some tips that can guide you towards finding a licensed moneylender in Singapore. By checking our tips, you can find the difference between a trustworthy lender from those engaged in illegal business.
1. Legal moneylenders steer clear from telemarketing services or sending out SMS to potential clients
One sure way to identify a reliable moneylender from an illegal one is with the way the services are provided to clients. Nowadays, you may receive random SMS from businesses that advertise their products and services. But a licensed lender does not use such tool to send information about the business to the public. In fact, the IPTO guidelines do not recommend advertising through telemarketing or SMS. The same holds true with Singapore’s privacy acts, and companies that are caught not complying with this regulation run the risk of being penalized by the government.
Unfortunately, some moneylenders engaged in illegitimate business practices have started implementing the technique banks use when sending text messages to customers. These templates are tweaked a little by adding the moneylender’s phone numbers, so they can bait and entice people to borrow money from the company. In fact, there are instances that they even use the names of actual legal lending companies in the country, so they can trick people and make them believe they are indeed the real deal. Never fall for these tactics since legal moneylenders never resort to such methods. This is why it is wise to never respond to such texts if ever you receive one, so you will not fall into the traps of these illegitimate businesses.
2. Only illegal money lenders do online bank transfers
If ever you come across a money lender offering bank transfers online as a tool for sending out some cash to borrowers, it is best to take caution and consider it as a red flag. The only reason they do this is due to their fear of being identified as illegitimate if they perform the proper way of lending money to clients. They do their best to avoid paperwork, and they may not even have a physical office where you can visit them for your concerns and inquiries.
On the other hand, a legal moneylender will require you to submit paperwork to back up your application, and you will need to come to their office to verify all the details you have sent to them. This is a legal and professional way of processing the application, which also allows for clarifications by both sides.
3. Do not give information about your SingPass over the phone or through text
Every individual has a unique SingPass, and this contains sensitive pieces of information about you. This is why you should do your best to protect your SingPass from anyone, specifically over the phone. But with illegal moneylenders, they always require borrowers to give such information over the phone for the purpose of determining the employment status and income of the potential client. Keep in mind that the verification process is only performed on-site and personally instead of over the phone or through text.
4. Do your homework before choosing a moneylender in Singapore
Not all money lending companies are created the same. There are those that are duly licensed by authorities, while others are conducting their businesses illegally. This is why when choosing a lending company, make it a point to head to the IPTO website first instead of making a random Google search for moneylenders. You can find information about listed and licensed moneylenders in Singapore by checking the IPTO website. Key details are also indicated there such as a valid and active license number, which must also be posted on their office.
Thus, do not rush when searching for a lending company. An extensive research can make a huge difference in the overall process involved in finding one for your needs. After all, you may only find yourself stuck in deep water if you act on impulse and deal with an illegal money lending company in the country. It may be too late for you to get out of the situation, and you will end up wasting more time and money along the way. Reading reviews and testimonials of actual customers can also give you an idea as to whether you can rely on the moneylender in question or not.
5. You will need to visit the office of a licensed money lender for your income documents and other paperwork
If you are told that you can simply submit everything through fax or email, without the need to send documents in person, then you should trust your instincts when you suddenly get the feeling of uncertainty about the money lender. Moreover, if there is no actual office or retail shop that the lender can tell you once you ask about the location, you should run to the other direction and look elsewhere because you may only be up for some serious trouble.
A legal money lender has a physical office that you can visit, and you are expected to come in person to collect your cash. This is the IPTO’s regulation, which makes sure that the paperwork is legal and binding. But don’t worry – the whole process should not take too long, and it may only last from 15 to 30 minutes at the most.
6. There is a registered landline that legal moneylenders use for their office
There are numerous safety measures implemented by the Singapore government to protect its people from illegal businesses. So, if you want to be sure that the lending company is indeed legitimate, one way to determine this is by checking if there is a registered landline. This is how the company reach out to their clients in case they wish to advertise or whenever they address people’s inquiries and concerns.
As for illegal moneylenders, they only use their overseas numbers or mobile numbers for advertisement. This is how they conceal their business as they are not allowed to operate legally due to lack of paperwork on their side. So, if you receive a call or SMS from a mobile number, never take up their loan offer since you can be certain that it is not a legal business operating in the country.
7. Read and understand the contract before you sign it
Once you are approved of a loan, you will need to request for a contract that indicates information about your loaned amount, interest rates, penalties, and schedule of payment. The language used in the contract must be one that you can understand, so there will be no confusion or uncertainty as you read it.
Always be careful before you sign a contract. Read the items carefully and ask for clarifications if need be. If there are details that may seem too vague or unclear to you, never hesitate to ask questions, so you know exactly what you are getting into. If the moneylender refuses to address your concerns, then it is not worth affixing your signature because you may only get further down in trouble by choosing to deal with an illegal lending business.
Now that you know what licensed moneylenders are like and how illegal businesses operate, you should be able to tell the difference during your search for a company that could best meet your needs for emergency funds without getting scammed.
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