How to determine the legitimacy of a money lender?

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Paying off debts and managing expenses is difficult in one of the most expensive cities in the world. In the midst of all this, you might feel overwhelmed when you suddenly have some emergency expenses. In such situations, you might need financial support like a loan. But you should be wary of loan sharks before taking out a loan from the first lender who offers it to you.

Loan sharks, also known as “ah longs”, are unregulated lenders who offer quick loans at exorbitant interest rates. They charge higher interest rates than allowed by law. But their use of harassment as a method of debt collection has made them notorious.

According Credit Bugis, consumers can borrow funds only from banks or approved lenders to avoid further financial problems. But is it safe to take out a loan from a Singapore registered lender? The Department of Justice is responsible for supervising approved lenders. Need to know more about determining the legitimacy of a lender? Continue reading.

Who are the authorized lenders?

A legal lender operates a verified financial institution subject to the Lenders Act. One of the many financial aid programs available are foreign loans, personal loans, payday loans, and cash loans.

The Pawnbrokers Act protects borrowers and regulates licensed pawnbrokers. The law establishes maximum loan amounts for unsecured loans, controls the advertising of official lenders, and provides a place where borrowers can quickly check the lender’s credibility.

The Singapore Ministry of Justice website lists all approved lenders in Singapore. The Lenders Registry updates its database of lenders once a month. The list will include all relevant details about a lender, such as:

– Company Name

– Key contact details

– License number

– Work address

Prohibited practices for a regulated lender:

Loan sharks, often known as unapproved moneylenders, are widespread and employ different strategies to trick gullible people into taking out a loan for them. That said, you need to understand what approved lenders do not indulge in. Here are some warning signs to watch out for:

– Require your SingPass ID or password

– Retains any part of the principal amount for any reason whatsoever.

– Threatening or offensive language.

– Asking you to sign an unfinished or blank loan agreement.

– Refusal to return your NRIC card or other crucial personal identification documents, such as your passport or bank card.

– Loan approval without receiving your loan application or performing due diligence.

– Giving you credit without fully explaining the terms to you.

Remember that a legitimate money lender will never use these techniques. Most importantly, they are not allowed to use threatening or abusive language. They will never bother you or your loved ones when applying for a refund.

Final Thoughts:

The most realistic option for your financial situation might be to take out a loan. However, you must exercise caution in determining the legitimacy of the lender. Check their license and inclusion on popular aggregator and comparison websites.

Trust-only authorized lenders. Contact financial institutions with a long history, 5-star ratings on Google Reviews, and have been chosen by popular aggregator and comparison websites as top approved lenders in the region of your choice.

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