Are you considering borrowing a loan from a licensed moneylender in Singapore? Well, it will be essential to understand how to go about the process responsibly.
Therefore, in this post, we’ll guide you in making informed decisions and steer clear of some pitfalls.
Why Choose a Licensed Moneylender?
In Singapore, all moneylenders adhere to the rules the Ministry of Law laid down. This means that they must always be transparent in their terms of lending money and fair in lending to you. Therefore, when you borrow from a licensed moneylender, you can be sure that the interest rates, fees, and terms comply with Singapore’s legal framework.
However, that doesn’t mean you should now go about borrowing left, right, and center. You ought to be certain of your responsibilities and rights as a borrower.
Tips on How to Borrow Responsibly from a Licensed Moneylender
The following are basic steps you will undertake while dealing with licensed money lenders to fulfill your needs while taking care of your long-term financial health.
Assess Your Financial Situation
Know your money needs. By understanding how much you need and whether your needs justify taking any new debt, you can determine how much you actually must borrow. Therefore, before you approach a moneylender, look honestly at your finances. Ask yourself if you need a loan and if you can return the loan on time.
Borrowing should be a last resort, not a quick fix for poor money management.
Importantly, look at your income and expenditure to decide whether you can repay the due amount within the payment schedule with no defaults.
Check the Licensing of Moneylender
In Singapore, only Licensed Money lenders can operate, for which
You have to check from the official listing at the Registry of Money Lenders web portal.
Never accept loan offers over text messages, WhatsApp, or social media. Those will most likely be illegal lenders.
By verifying the legitimacy of the moneylender, you protect yourself from probable scams and unscrupulous practices.
Know Your Borrowing Limits
As stipulated by the Singapore government, the loan limits ensure that you do not overstretch your financial muscles. Mainly, your borrowing limit depends on your level of income. For instance, if you earn below $20,000 annually, you can borrow only a maximum of $3,000 from licensed moneylenders.
On the other hand, if your annual income is 20,000 dollars and above, you can borrow as much as six times your monthly income.
Do Not Over-Borrow
This might be tempting when you qualify for more amount than you need. Over-borrowing culminates in financial constraints. The best thing is to get what you need and the amount you can afford to pay back.
Know Your Rights as a Borrower
As a borrower in Singapore, you are entitled to rights, including getting a loan contract stating all terms and conditions, and not being harassed or mistreated by the moneylender. Also, you can complain to the Registry of Moneylenders when treated unethically.
Educate Yourself
Responsible borrowing is a product of information. Keep updated about the rules and regulations for licensed money lenders and all other new changes occurring within the lending industry in Singapore. This will give you more confidence in making better decisions.
Conclusion
Borrowing from a licensed moneylender in Singapore and borrowing responsibly is safest whenever you need financial assistance. Mainly, it is always preparation, understanding the terms and conditions, and the commitment to timely repayment that remains the key to opening you up to cash possibilities and securing your financial future.
Therefore, always borrow with care, and don’t hesitate to ask for help from a financial advisor whenever necessary.