Behind the lights and glamour of Singapore's concrete jungles lies a world of unlicensed moneylending that festers and continues to resist the hammer of enforcement. Behind a veneer of kindness and understanding, they prey on the vulnerable, offering succour when financial constraints strike. But a closer look and much research reveal them for what they really are: wolves in sheep's clothing.
Today’s rather volatile market in large part due to the Covid-19 pandemic has resulted in more and more people facing financial difficulties.
To address financial woes, generally, most go to friends and family. Some are willing to deal with long approval processes, stringent credit checks, and high-income requirements required by banks. If none of the previous choices is ideal, at this point, a few unfortunate people, resort to the worst possible option: unlicensed moneylenders.
This might beg the question: is there such a thing as a licensed money lender?
Yes. Licensed moneylenders are financial institutions authorised by the Ministry of Law Singapore (MinLaw) to conduct money lending services. They operate under a list of laws and regulations set by the government to protect borrowers from predatory actions such as exorbitant interest rates, harassment and other criminal activities.
Unlicensed moneylenders come under different guises, and it can become difficult to tell them apart from licensed moneylenders.
However, a few telltale signs can help you single them out and avoid them; and one of the starkest (and our most favourite) is advertisements.
Unlicensed money lenders love a good flyer, and you’ll also find them sending text messages and emails offering ‘easy loans’. Our advice: run for the hills.
Licensed moneylenders are only allowed to advertise their services on consumer directories (print or online), websites belonging to them as well as on the exterior of their premises.
Another way of identifying unlicensed moneylenders is by looking at their interest rates. By law, moneylenders are not allowed to charge interest of more than 4% per month.
In addition, unlicensed moneylenders also tend to provide, presumably, any amount you can request. Bad sign, stay away. Licensed moneylenders are only allowed to lend 6 times the monthly income of the borrower if they make more than S$20,000 annually.
The last and best way to tell the difference between a licensed and unlicensed moneylender is by checking them against the list of licensed moneylenders provided by the Ministry of law.
Licensed moneylenders often require minimal documentation from borrowers compared to banks - and in some cases - other unlicensed operators who go to the extent of requesting unreasonable information such as bank passwords.
Licensed moneylenders are prohibited from employing any violent, threatening or harassing behaviour when collecting a debt. So if you take a loan from a licensed moneylender can rest assured your life and that of your family is safe from harm.
The last thing you need after taking a loan is to get hit by a wave of charges you didn’t even know existed.
Any transaction with a licensed moneylender will be transparent. Beginning in 2015, all moneylenders are required by law to impose only the following charges:
When you take a loan from a licensed moneylender, you can breathe easy knowing that before you walk in the door or contact them, the interest charged for a loan won't exceed more than 4% as required by law.
When it comes to approval procedures or loan terms, licensed moneylenders are easier to negotiate with compared to banks.
Licensed moneylenders understand the need for cash in an emergency. As such, approval processes are quicker and easier to navigate, with loans granted within 24 hours of applying.
Due to the bad publicity surrounding loan sharks, many people are misinformed about the true nature of licensed moneylenders. We are here to shutter a few of the myths to better help you make informed decisions.
Singapore’s Ministry of Law has set precise regulations for licensed moneylenders to follow, which include interest rates capped at 4%. When you include other charges such as administrative fees, coupled with the fact that some moneylenders choose to offer loans at 3% to 4% interest, the final costs do get quite expensive.
The mainstream rationale for this is due to the inherent risks that come with more lenient requirements for loan approval.
Despite this, at Friday Finance, we still strive to make our loans as stress-free as possible. We offer interest rates starting at 1% and incentives for prompt repayment, such as a 50% refund of administrative fees.
This is simply not true. Consider, for example, entrepreneurs who need quick turnaround and are sometimes limited by financial constraints hampering quick delivery. In a situation like this, a cash advance facilitates delivery and may even result in more business in the long term. There are a multitude of reasons why financial healthy individuals would take loans - in most cases, it is centered around convenience.
Licensed moneylenders differ from banks in that solid credit ratings are not necessary to acquire loans. Friday Finance, for instance, takes into account current and future earning capacity before providing a loan.
The type of loans you can get from a licensed money lender vary based on the company. Some offer only personal loans, most offer a combination of loans from mortgage loans, to payday loans, debt consolidation loans and more.
At Friday Finance, we offer three broad categories of loans: life stage loans, startup loans, and income advance loans.
Life stage loans are designed to cater to individuals who need to cross an important stage of their lives. From loans to further studies with the goal of expanding career prospects, to home renovation loans, and wedding loans, these loans are structured to be comfortable to pay over a period of time.
Meanwhile, our startups loans are designed to assist and facilitate startups in their infancy. The type of loans under this category include loans for working capital, rental down payment as well as loans for business expansion.
Income advance loans on the other hand are built around the needs of working individuals who may need an advance while they wait for their business to pick up or to pay off.
One example is real estate agents who are often at the mercy of the long period of time it takes to complete a transaction. An income advance would be helpful in this case to tide them over while they wait for their commission. Taxi drivers or e-hailers, freelancers and any other self-employed individuals can benefit from this type of loan.
Loan eligibility varies from moneylender to moneylender. At Friday Finance, to be eligible for a loan, you have to be a citizen or a permanent resident of Singapore.
For unsecured loans, we provide a maximum of S$3,000 for individuals with an annual income of less than S$20,000. While those who earn more than S$20,000 are eligible for loans 6 times more than their monthly income.
When it comes to secured loans (loans with collateral), the amount we provide will depend on the value of the asset.
Friday Finance is committed to providing a stress-free experience for all our clients. We have prepared flexible loan repayment terms to account for different income patterns.
Borrowers are able to choose between weekly or monthly payment modes and to top it all off, our system rewards early payment.
To be specific, the earlier a payment is made the less interest is incurred. And what is better is that Friday Finance shaves 50 percent off administrative fees when a loan is fully repaid on time.
Done correctly, loans can help you get out of a sticky spot and let you come out of the other side bigger and better. However, there are a few factors to consider before applying for a loan.
The first and - we reckon - the most important is a pressing need. It's poor form to get a loan only to spend it on frivolous items which only serve to impact your financial health negatively.
It's also advisable to get a loan when - after an exhaustive search - you can find no loan catered to your specific needs. For instance, if you want to put a down payment for a car, then it's better to get a loan from a bank that offers car loans. The reason being that those ultra-specific loans are more likely to lower interest rates.
Last but not least, you want to make sure you are able to repay the loans; the last thing you need is for a new loan to become a financial burden, especially when it is supposed to ease your financial situation.
Start your loan application online on our secure portal, app.fridayfinance.sg.
Once approved, you will receive an SMS notification informing you about the approval and a link for you to set up an appointment for a face-to-face meeting in our office.
Once completed and the meeting concluded, the loan amount will be deposited in your bank account and you will receive an SMS notification about the disbursement.
At Friday Finance, we differentiate ourselves through an emphasis we place on the well-being of our clients. Our services and financial solutions are aligned towards providing a stress-free experience.
One example is how we offer Singapore’s first Personal Loan Protection Insurance to provide coverage for individuals who take up unsecured personal loans.
It is designed to protect our borrowers against the financial burden that arises in the event of an accident. If the accident results in death or permanent total disablement, the outstanding loan is waived.
If the accident results in temporary disablement in which the borrower is hospitalised for more than two weeks, then the loan instalment is waived for up to two months.
Furthermore, we have gained a reputation for conducive repayment schemes such as how prompt repayment is awarded up to 50% discount on administrative fees or the fact our repayment is based on a reducing interest basis.
“Friday Finance provides quick and professional assistance in times of needs. Their staff is courteous and professional in assisting consumers. Highly recommended.” - Thomas Yeo
“We got rejected by the bank twice and we found FRIDAY FINANCE through a sourcing out company. They were friendly and they were able to give an acceptable amount to loan out. We were happy with the process as it was simple and hassle-free if you are happy with all the conditions they provided. Do seek them out if you are in need of help and be responsible for your own actions in taking loans.” - Kamilah Jalil
“Cheaper than banks’ credit lines. Fast and personalised services and very professional in handling loan application - they even helped me discover discrepancies in credit bureau reports which may have adversely affected my credit rating. The 50% discount of processing fee for prompt repayments is the icing on the cake :) Thank you Friday Finance!” - Hsin Ler Cao
“I would like to recommend Friday Finance to anybody who wants a loan and need professional advice and transparent upfront staff to explain everything in the docs...a new set up but excellent service...especially Ian who was very professional and sincere...Thank you Ian and Friday Finance for your service.” - Azimkhan Khanazim
Getting a loan doesn't have to be stressful. Working with the right licensed money lender can transform your financial health from zero to hero. That is our goal at Friday Finance, If you wish to get started on your loan application, you can do so by clicking the link here.
