28 Aug What to Know before Borrowing from SG Licensed Money Lenders
Looking to get a loan approved or borrow money from the top licensed money lenders in Singapore for a fast private personal loan, business loan or payday loan? With numerous lists of licensed money lenders to choose from, including options in Chinatown, it can be overwhelming trying to identify the top money lenders that offer competitive interest rates and good service. This article will explain everything you need to know before borrowing from licensed moneylenders in Singapore. You’ll learn about the different loan types offered, standard terms and conditions, how to apply and get your loan, compare options across lenders, calculate true costs, avoid pitfalls and borrow responsibly.
Whether you want to take up a personal loan from a licensed money lender to finance your renovation, business loan to expand your company, or a payday loan to cover urgent bills, this post will help you find the most reputable licensed money lender in Singapore. You’ll understand how to engage with lending officers, carefully evaluate loan terms, check interest rates and fees for money loans, and ultimately select the best-licensed money lender that provides fast loan approval and good rates tailored to your financial situation and credit score. By being an informed borrower, you can make the most of licensed money lending services in Singapore and get access to legal financing to overcome short-term cash flow issues. Let’s get started!
Who are Licensed Money Lenders?
Licensed moneylenders, also known as legal moneylenders, are companies or individuals in Singapore that the Registry of Moneylenders approves under the Ministry of Law to carry out money lending activities. They play an important role in serving segments of the population that need access to fast, short-term financing but may not qualify for bank loans or financing from other mainstream financial institutions.
To become a licensed money lender, an applicant needs to meet certain requirements set by the government, such as having a minimum paid-up capital, keeping proper accounts, and hiring qualified credit officers. Licensed moneylenders are regulated under the Moneylenders Act and rules such as capping the maximum interest rates chargeable.
Licensed moneylenders provide small personal loans that are typically unsecured, meaning the borrower does not have to pledge any collateral. The loans serve immediate financial needs, with a streamlined loan application process and quick disbursal of approved loans within a few days.
Some common personal loans offered by licensed moneylenders include payday loans, foreign loans, business loans, loans for home renovation or big-ticket expenses, and vehicle financing loans. The loan amounts are usually a few hundred to tens of thousands of dollars. Licensed moneylenders provide quick loans with streamlined approval processes to meet urgent financing needs.
Types of Loans Offered by Licensed Money Lenders
Licensed money lenders in Singapore cater to individuals and SMEs who need urgent access to short-term small loan amounts. The main types of loans offered include:
Personal Loans
Licensed money lenders offer fast unsecured personal loans up to S$35,000 for Singapore citizens and PRs. Personal loans can be used for personal needs like medical bills, home renovation, debt consolidation, big-ticket purchases, travel expenses, or weddings. Interest rates start from around 4% per month or 48% per annum for these small personal loans. Tenures up to 3 years are available.
Payday Loans
Payday loans provide fast cash until your next paycheck arrives. These help overcome short-term unexpected cash crunches before payday. The maximum payday loan amount offered is S$3,000, and repayment terms are flexible for up to 6 months. With minimal eligibility criteria, you can get payday loan approval in minutes and receive the cash immediately.
Business Loans
Licensed money lenders also provide SME financing through business term loans and business cash loans. Loan amounts range from S$5,000 to S$100,000 with repayment periods of 1 to 3 years. The business loan can be used for working capital needs, business expansion costs, equipment purchases or inventory financing. Interest rates start from 8% per month.
Foreigner Loans
Individuals who hold eligible work passes such as EP, S Pass and Work Permit and are employed in Singapore can obtain a loan of up to S$3,000 from licensed money lenders. The monthly interest rate starts from around 10%. These foreign loans help meet urgent cash needs before your next salary payment. The streamlined approval process also makes it easier for foreigners to secure short-term financing.
Consolidation Loans
A consolidation loan is a type is a type of personal loan that can be used to combine several high-interest debts into a single loan with a fixed monthly payment. Borrowers can consolidate and repay multiple outstanding debts through an affordable debt consolidation loan from licensed moneylenders. Consolidation loans are useful for managing revolving lines of credit and high-cost loans that have high interest fees, such as credit cards, retail credit cards, gas cards, payday loans, and title loans.
Want to know more about business loan in Singapore? Click the below article!
A Beginner’s Guide to Getting A Start-Up Business Loan in Singapore
Differences between Banks and Private Licensed Moneylenders
When evaluating where to borrow money from the best-licensed sources, there are several aspects to consider when comparing banks in Singapore versus private licensed moneylenders. Some of the main differences include:
Faster Approval
If you meet their requirements, money lenders can approve loans in a few hours or on the same day. This is because they have simpler internal processes and less paperwork. Moneylenders deal with small loan amounts, so they don’t need lengthy credit checks.
In contrast, bank loans require more documentation, detailed credit checks, income verification, and management approval processes. That’s why bank loan processing fees can take 2-3 weeks or more to get approved.
Lower Requirements
Banks have more rigorous eligibility criteria for borrowers, including excellent credit scores, stable high income, sufficient savings and good debt-to-income ratios. Getting a bank loan is easier if you have a strong credit history without defaults.
Licensed moneylenders are more flexible with their requirements as they serve those who urgently need loans but may not meet strict bank criteria. They focus more on the borrower’s repayment ability.
Higher Interest Rates
Licensed money lenders charge high-interest rates of 4-10% per month to compensate for the risk and costs of lending small, unsecured loans. Banks can charge lower rates (1-2% per month) as they lend larger amounts with collateral, so risks are lower.
Smaller Loan Amounts
The maximum loan amount from moneylenders is S$35,000 for Singapore citizens/PRs and $3,000 for foreigners. Banks provide personal loans up to 6 times your monthly income, which can amount to over S$100,000.
Collateral
Banks secure their risks by taking fixed deposits, property or vehicles as collateral. Money lender loans are unsecured – they take higher risks and charge higher interest rates.
Things to Know Before Borrowing from a Licensed Moneylender in Singapore
When you are looking to get a loan approved by a licensed moneylender in Singapore, there are several things you should keep in mind:
Compare Interest Rates And Fees
Interest rates and fees, like processing charges, can vary quite a bit between licensed moneylenders. Compare quotes from multiple lenders to find the most competitive rates for your loan amount.
Higher Interest Rates
The interest rates charged by licensed moneylenders are typically 4-20% per month, much higher than personal bank loan rates. Account for the higher interest costs in your loan repayment budget.
Read And Understand The Loan Contract
Before your loan is approved or signing any contract with a licensed moneylender, carefully read all the terms and conditions. Ensure the interest rate, loan amount, tenure, repayment schedule etc, match what you discussed and agreed upon with the loan officer.
Be Transparent About Your Financial Situation
When applying for a loan, provide accurate documentation and information about your income, expenses, debts, and loans. This helps the lender assess your repayment ability realistically.
Assess Repayment Ability
Evaluate whether the proposed monthly or weekly loan installments fit within your regular income flow after accounting for other loan repayments and living expenses. Don’t take on excessive debts.
Reasons Your Loan Application with Moneylenders Gets Rejected
When trying to get a loan approved or borrow money from a licensed moneylender, there are a few reasons your application may get rejected:
Insufficient Or Unstable Income
Most moneylenders requires income over $2,000/month and proof of regular income through documents. Fluctuating casual income can lead to rejection.
High Existing Debt
If existing loans and credit card debts already take up over 60% of your monthly income, you may seem over-leveraged, unable to service more debt.
Reached Borrowing Limit
New lenders may reject another loan if you already have outstanding loans exceeding $30,000 with other moneylenders.
Take Up a Loan with JD Credit
Where to borrow money in Singapore? If you need urgent access to financing, reputable licensed moneylenders like JD Credit can be a practical solution, especially if looking for a money lender near you or in Chinatown. However, being an informed borrower is key – compare interest rates between lenders, verify licenses, read contracts thoroughly, and only borrow what you can realistically repay.
JD Credit Pte Ltd is a licensed moneylender in Chinatown. They offer competitive 2% monthly interest rates on small personal and business loans from $500 to $30,000. With efficient approval, loan disbursal is often same-day. Before borrowing, review your credit report and financial obligations to determine a comfortable loan amount to repay. For larger, long-term financing above $100,000, banks may be preferable given lower rates on bigger loans. Carefully weigh your options based on your situation to identify the best financing source. Licensed moneylenders like JD Credit suit urgent small loans, while banks fit big-ticket financing. Being a selective, informed borrower allows using lenders advantageously during cash crunches. With prudence, fast legal financing can be obtained, including private personal loans, payday loans and foreigner loans in Singapore.
Need to take up personal loan in Singapore? Check this article out!
How To Get A Personal Loan With Low Income Or Bad Credit In Singapore
