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There are various reasons why you need a personal loan and we understand that. You may either need it personally or you just wanted to help a friend or a family member. Whatever the reasons are, we know that you need additional funds.

Before checking over from a licensed moneylender, you need to consider other practical alternatives. One of the options is through checking the Government agencies for financial assistance. There are numerous agencies that can offer financial help, all you need to do is get in touch with them and talk about your needs.

When you prefer to borrow from a licensed moneylender and you might find it as the best alternative for your financial needs, always remember your legal obligations. They have specific terms within their contract that you must abide. Take also into consideration your income, you need to think it over if it can suit your loan contract.

To be a smart borrower, you need to consider that you must borrow money just enough for your needs. It should fit within your capacity to pay. Make sure to avoid late payment since it can give financial burden to you and can affect your family.

So, always make smart borrowing decisions, think ahead before approaching a licensed money lender.

Licensed moneylenders can charge only a monthly interest rate of up to 4%, effective 1st of October 2015. This applies to all types of income brackets and whether it’s a secured or an unsecured loan. If you end up paying late, the money lender can charge a late interest of up to 4% monthly for each month of late repayment.

All monthly interest rates must be computed based on your principal remaining – the deduction of your payment to the original principal.

Aside from the interest rates, take note that you are also required to pay for fees. And what are these fees? Effective October 1, 2015, all the licensed moneylender must only charge you the following:

• For a late monthly repayment, they must only charge a fee that must not exceed $60
• A fee not exceeding 10% of your granted principal loan
• You are required to pay for the legal cost when the moneylender is successful in claiming the recovery of your loan

The total charges or given to you must not exceed the total amount of your principal loan.

If you have decided that borrowing money from moneylenders is the best option to address your financial needs, you need to check first if they are licensed.

Never take a loan from an unlicensed one or else you’ll end up with a financial headache.

The first thing that you need to do in order to verify their licenses is through validating it at https://rom.mlaw.gov.sg. The Registry of Moneylenders contains the lists of all licensed moneylenders.

Be aware also if licensed moneylender is doing the following:

• Use of threatening, abusive or offensive language
• Requires you to provide your personal user ID and password or your Singpass
• Retaining your personal ID or NRIC or other personal documents which includes your driver’s license, work permit, employment pass, password, or even your ATM cards
• Requires you to sign a note of a contract that is either blank or an incomplete one.
• Giving you the loaned amount without providing you a copy of your note of contract or either not explaining clearly the terms and conditions of your loan.
• Granting you the loaned amount without following the proper process ( i.e. this can include sending you a loan approval message either over the phone or email even before completion of your application requirements plus supporting documents such as asking you with tax assessment and payslips).
• Withholding any part from your principal loan amount without explaining the reason

If you have encountered such unacceptable practices, it is a must to report it at the Registry of Moneylenders.

Remember also that you always deserve to go through the proper process. Beware of unlicensed moneylenders.

You need to make sure that the moneylenders have done the right procedure of granting your loans. Before taking any money, make sure that you’ll come to the office of a licensed moneylender to do the following:

• Authentication of your identity – where you will undergo a face-to-face verification, validating your identity against your original submitted documents
• Informing you the terms and conditions -the ender explains well the terms and conditions in an understandable language
• Verify if the lender delivers you the right principal loan amount. Make sure also that they apply the right fees according to standards (please check the ‘What are the fees that my licensed money lender can charge?’ section)
• Make sure that you understand well the payment terms to avoid late interests and fees.

Each time that our loans were granted, you need to take note of the repayment. In repaying your loans, you have to do the following:

• Whenever you repay make sure that you are given a receipt by the moneylender. Ask also for a receipt every time you pay for fees. These receipts must be dated and signed.
• Always validate for the correctness of the information on your receipt
• Remember to avoid late interest and fees, so pay your loan accordingly.
• Within at least once every six months, you must receive a statement of account of your loans. Always validate for correctness this includes your name, the value, and the date
• Keep intact all your statement of accounts, payment receipts, documentation, or evidence of your payments
• Always be a responsible borrower. Make sure that you always understand the terms and conditions. If ever, avoid late payments because it can affect your credit score and can be a burden either to your family or yourself.