People love money
This is a fact of life. The people who love money the most are bankers and other money lenders. Their business practices may not be the most ethical which is why you need Moneysmart to help you navigate this complicated industry.
They will help you find ways to compare money lenders to make sure you get the best deal possible no matter what you need the loan for. To help you find the right lender, they have put together the following guide to make sure you know how to find a licensed and honest money lender.
Factors to check to find a legal money lender
#1. Does the company have a license- if they do not, then it is best you make your apologies and stop the inquiry? Legal money lenders have a license and it is not hard to check to make sure if the license is valid or not.
#2. Are the terms & conditions transparent and accessible- legal money lenders will make sure you can see and read all terms and conditions. Plus, they will give you time to read them and make your decision.
#3. The fee limit- legal money lenders will only charge you a maximum fee amount set by law. That figure is 10% of the total principal amount. This factor is crucial when you compare money lenders as it is a red flag when the lender you are negotiating with wants to charge more than 10%.
#4. Check their reputation- if their reputation is above board and stellar then that will be easy to check. The whole process will be transparent and their behavior influenced by integrity. read reviews and feedback statements made by previous customers to help you determine their reputation
#5. Ask about their processing time- illegal lenders may approve you over the phone or through a text message without you sending them an application. Legal money lenders will have a fast processing time but not that fast.
#6. watch how they advertise- legal money lenders will advertise in 3 ways- through their website; consumer or business directories; advertisement displays outside of their office.
Illegal lenders usually tend to use SMS messaging, e-mails, flyers, and similar methods.
#7. Compare interest rates- when you compare money lenders make sure to read the fine print and see what interest rate they will charge. Look for hidden charges that are only found in the small fine print of the contract and be wary of those lenders who charge a very low, too-good-to-be-true rate
#8. Legal money lenders always abide by the law- this is important as they will make sure you clearly understand the information about the loan, etc., they will not hide information from you and they will explain the cautionary statement.
That cautionary statement contains information describing an abusive money lender and provides a warning to avoid those money lending companies. Then the legal company will ask you to sign underneath the statement to signify that you understand what was explained to you.
Tips that you are dealing with an illegal money lender
#1. You get a request from the company asking you to transfer the loan processing administration fee upfront
#2. The company or agent for the company asks you to give them your SingPass ID & Password
#3. Asking you to sign a blank contract form
#4. Providing you with a completed contract form to sign yet do not explain all the terms and conditions to you nor give you time to read those terms and conditions
#5. You receive SMS messages advertising their company and financial services
#6. Getting approval for your loan immediately over the phone or through an SMS message
Signs of a legal money lender
#1. They will not charge you more than 4% per month for a personal loan
#2. Will not charge you more than $60 for late payment
#3. The total fees will not exceed the principal sum of the loan (those fees are- admin fee, late payment fee, interest)
#4. The administration fee is capped at 10% and they can only be charged once. Then only after the loan has been approved
#5. All interest rates must be charged on a reducing balance basis- compound interest rates are not allowed.
Some final words
Searching for a legal and credible money lender is hard and tiring work. There are so many factors to watch out for that sometimes it can be a daunting task.
However, the information provided above should help ease your search and when you compare money lenders, you should be able to spot the legal from the illegal very quickly.
MoneySmart wants you to make sound and intelligent financial decisions. That is why they are standing by to help you when you need financial aid. The best thing to do is give them a call and get the best advice possible when you need money.