Moneylenders are private people or agency that provide people with Singapore cash loan services when they needed and charge them with interest. They are different from banks and other financial institutions but they do the same operations. Many countries have laws that requires the moneylenders to be registered. The interest rates they charge should also be set with proper limits. The reason that moneylenders are widespread is because poor people tend to get money from moneylenders rather than banks.
There are various guidelines for borrowing money from moneylenders
1) Before approaching moneylender, consider other options like banks.
2) Consider whether you can abide by the contracts because there will be more consequences if you do not follow them.
3) Buy only the amount you can repay.
4) Do research on various moneylenders who offers more favourable conditions.
5) For secured loans, you can get money without limits.
6) For unsecured loans, there are certain conditions to follow.
The interest rates should also be previously registered and mentioned to the buyer as well. The effective interest rate takes into account compounding effect of the installments paid over a certain period of time. The maximum interest rate a moneylender can charge their customers is 4%. There are six types of fees moneylenders can charge their clients.
- Whenever the repayment is paid late
- When the client makes changes to the loan contracts
- Early redemption or early termination of the loan as requested by the customer
- For wrong or dishonoured cheque given by customer
- For unsuccessful deduction from bank account regarding GIRO
- Any other costs incurred while getting the loan
Verify that the moneylenders are verified by checking the list of verified moneylenders list. Be mindful that the moneylenders do not use abusive or threatening behaviour towards you.