When it comes to personal loans or money lending services, illegal moneylenders, or more commonly called “loan sharks” are an inevitable point of discussion. Unfortunately, loan sharks give a skewed and unfair impression of money lenders to Singaporeans.
As the news reports on the unsavory activities of loan sharks, including unscrupulous principles or the use of violence and force that loan sharks employ for late repayments, licensed and legal money lenders are often put in the same discussion.
To set the case straight with the, here's a list of differences between licensed legal money lenders and loan sharks for you to identify whether a money lender is operating on illegal or legal grounds in Singapore.
1. Illegal money lenders advertise through text or call | Legal moneylenders only advertise through legal channels, such as their website
In Singapore, money lenders are restricted from advertising and soliciting individuals via SMS, telemarketing services. If you receive a message or a call that's offering personal loans, delete or ignore them!
Under Singaporean law, licensed money lenders are only permitted to advertise through:
(a) business or consumer directories (in print or online media)
(b) websites belonging to the moneylender
(c) advertisements placed within or on the exterior of the moneylender’s business premises.
That's how you tell the difference!
2. Illegal money lenders will favour and push for online transfers | Legal money will require appointments, paperwork and proper procedures
Naturally, illegal money lenders would like to speed up the process of the loan and avoid as much paperwork as possible. They will also often skip the step of meeting up on an official premise!
A legal and licensed money lender will carefully guide you through the application process of a personal loan - this will involve a multi-step process (that's thankfully brisk and speedy) that involves registering for an account, filling in application documents and more.
Most importantly, you are needed to visit the money lender in person - this is required via Singaporean regulation. During this appointment, you will be signing the loan contract documents and relevant paperwork that is legal and binding.
3.Illegal money lenders will push for you to share your SingPass through text or mobile | Legal money lenders will encourage official channels and methods verified by the government
A Singaporean's SingPass is his/her entire life's details captured. This is an extremely sensitive information that should only be shared through official services, channels or methods.
Otherwise, a hasty procedure of sharing sensitive information over text is downright illegal!
4. Illegal money lenders will try to convince you of their legitimacy | Legal money will happily show your their licensed status
Illegal money lenders are willing to move heaven and earth to give an impression that they are legal to gain your trust.
However, there is simply no avoiding the list of licensed moneylenders by Singapore's Ministry Of Law - if you're listed, you're legal. Licensed money lenders are always upfront and clear on their legal status.
In case you missed it, Friday Finance is a product of IFS Consumer Services Private Limited - we are a licensed moneylender that's fully regulated by the Registry of Moneylenders of the Ministry of Law in Singapore.
Our customers enjoy amazing prices, service convenience and financial wellness in the safest and most secure manner.
With interest rates as low as 1% a month, a flexible repayment plan, loan insurance and on-time repayment rewards, taking a personal loan should be a like Friday, stress-free experience.
