What Are Licensed Private Money Lenders In Singapore, And How to Get A Loan If You Have Bad Credit?
There may be certain points in our lives where we require financial help to tide us through unforeseen situations. Perhaps it may be to finance a new car, to start your own business or simply to get you through your next paycheck. Most of us would turn to banks during such times of need.
However, what happens when you have a less than ideal credit score? Does this mean that you won’t be able to receive the financial help you require?
While most banks place heavy emphasis on one’s credit score, licensed private money lenders might be able to give you some leeway in this aspect.
What Are Licensed Private Money Lenders In Singapore?
To put it simply, these are private companies that are separate from traditional financial institutions. That said, they function in almost the same way that banks and other financial institutions would when it comes to providing loans.
They offer loans or money lending services to their clients. In order to be a fully licensed private money lender in Singapore, the company needs to be registered by the Ministry of Law – Registrar of Money lenders.
They then get an operating license to do business, if they operate within the rules and regulations of the government. These strict regulations have been put in place to protect the people from unfair interest rates and charges, as well as from being overburdened with debt that they cannot afford.
You can view the complete list of licensed private money lenders here.
As a legally licensed private money lender in Singapore, Katong Credit adheres by a stringent set of code of ethics put in place by the Ministry Of Law. We also strive to provide our customers with the timely and reliable financial help that they require.
5 Things Legal Money Lenders Are Not Allowed To Do
When you find yourself fraught with distress and worry over your finances, the last thing that you would want is to find out that you have borrowed from an unlicensed money lender.
There are several things that licensed money lenders are not allowed to do. Here’s how you can differentiate between a licensed and unlicensed private money lender. They include the following:
- They cannot advertise their services via social media platforms, text messages, and random fliers. They are only allowed to advertise on their own websites, and outside their premises.
- The administrative fee that they can charge is capped at 10%. They are not allowed to go over that amount.
- The nominal interest rates for licensed private money lenders cannot exceed 4% per month. In additional, late interest fee can also not be more than 4% per month and can only be charged on the late amount.
- Late fees cannot exceed $60 every month.
- Licensed money lenders are not allowed to solicit clients for loans.
It is of utmost importance that you do a thorough check the Minstry Of Law’s website for the complete list of licensed private money lenders before entering into any loan agreement. This is to prevent yourself from financially committing yourself to a loan with an unlicensed money lender.
Not only do they charge exorbitant interest rates, they also resort to unscrupulous means when you fall back on payment.
I Have A Bad Credit Score. How Can I Still Get A Loan?
When you have a poor credit score, it basically means that you have previous transactions which they have not handled too well.
It could be that you have defaulted on your past loans, or are making late payments on bills and loans. Declaring bankruptcy can also significantly lower your credit score.
All this information is listen in your credit history, which is a reference point for money lenders and banks. Having bad credit usually means that traditional lenders like banks and credit unions will not wish to provide you with the given loan.
However, as a licensed private money lender, we understand that having to worry about your finances is not a good feeling to have. Thus, in some cases, we are still willing to provide you with a loan.
On your part, you can also adhere to the following steps to increase your chances of getting a loan:
1. Consider the loan amount. Anyone with bad credit will not get any lender to give him or her large amounts of money. It is therefore, important that you work with a small amount of money instead. By applying for and repaying smaller personal loans, you can then begin to rebuild your credit and work your way up to larger amounts. It is important that during this time, you make timely payments because you are also working on rebuilding your credit reputation.
2. Restructure debt. Most times, people with bad credit tend to have an outstanding loan on which they have defaulted. The best thing to do in such a case is to create a debt repayment plan, pay your debts and then put in an application for a new loan. It is important to speak to the lender to have the debt restructured so that you can repay it with more ease.
3. Alternative funding sources. Anyone with bad credit will likely be turned down by traditional banks. This is the time to consider alternative sources of funding. Private licensed money lenders are a great consideration, because even though they are regulated by the government, they have less restrictions than some of these financial institutions. In some instances, they even have tailor made loans for people with bad credit.
What Are The Differences Between Borrowing From Banks Vs Licensed Private Money Lenders?
1. Loan Sizes. Banks have the capability to provide larger loans. That means that a bank is ideal for taking out a mortgage and renovation loan, but may deny loans to low income earners. Licensed private money lenders, on the other hand, concentrate their efforts on smaller loans. At Katong Credit, we strive to be able to provide all our customers with the financial help that they require.
2. Loan approval. Loan approval at the bank is a long tedious process and many times takes up to a month. Licensed private money lenders, on the other hand, can often approve a loan within an hour and provide the necessary cash on the spot. Katong Credit works with a 24-hour period between loan application and funds disbursement. This speed is ideal for those looking for emergency cash.
3. Interest rates. Generally, banks offer lower interest rates than money lenders, but this is often because they ask for collateral before giving a loan. Licensed private money lenders are willing to take the risk and offer unsecured loans to borrowers. To mitigate their risk, they tend to offer a higher interest rate. It is important to note that this rate is not exorbitant, because the government regulates how much they can charge in interest rates.
4. Lenient credit assessment. Banks are very strict about their credit assessment of each borrower and they are not as flexible as licensed money lenders. Basically if a borrower has poor credit they simply get denied. As a licensed private money lender, we tend to be more lenient and will generally consider your current income in making their decision of whether or not to provide you with the loan.
When you are considering taking out a loan, it is important to ensure that you are borrowing from a legitimate lender. Unlicensed lenders, who do not follow the rules and regulations laid out by the Ministry of Law, have been known to rip off unsuspecting borrowers. There have been multiple stories in the media about this.
An example is a story of a local man who responded to a WhatsApp message advertising money lending services. He borrowed $700 dollars only to end up paying back $7500.
Another unsuspecting victim responded to a WhatsApp message and borrowed $1000, only to pay back $4000. These borrowers ended up incurring exorbitant late-payment and administrative fees. In fact, the loan shark would become unreachable when it was time to make payments, or delay in sending payment details, only to charge daily late fees even though they were the ones at fault. The late fees quickly accumulated to well beyond a reasonable amount.
6 Things You Can Use A Personal Loan For From A Licensed Private Money Lender in Singapore
A personal loan does not come with any restrictions on how the borrower uses it. This makes it one of the most flexible loans available. It is also the go-to-loan for just about anyone who needs some cash. Here are 6 different things that one can use a personal loan for:
1. Wedding & Honeymoon Expenses. A wedding loan comes in handy because weddings are so expensive. Of course, it is ideal that one saves prior to the wedding, but in some cases, the bride and groom do not have enough money to cater to all the expenses. Some of the costlier items include the bride’s dress and venue, and then, there are other smaller expenses that include wedding coordinator fees, cake, photography and videography as well as flowers. If the money you have at hand is not enough, a personal loan can close the gap. Sometimes, the couple may have enough money for the wedding but not enough to cover the honeymoon. Taking out a loan to pay for the honeymoon allows you to enjoy your vacation time and pay off the loan later at a comfortable pace.
2. Pay off credit cards. Generally, personal loans have lower interest rates than credit cards. If you have outstanding balances on your credit cards that are making it difficult to pay down your debt, a personal loan can be of use. Simply take out a loan, pay off the credit card, and then repay the loan over time. The advantages include lower interest rates and a definite end date on the debt.
3. Medical costs. Medical cover is important, but there are instances when it doesn’t cater for all one’s expenses. Sometimes, it may not cover procedures, or they may be considered cosmetic in nature. Some of the medical procedures that may not be covered include fertility treatments, orthodontics, some dental services, and bariatric costs once the bill exceeds $5000, and cosmetic surgery.
4. Home renovations. Most times after you’ve purchased your new home or HDB flat, the next step is to renovate it and make it uniquely yours. If there is a limit to how much you can take as a renovation loan, and if the amount is not enough to cover the renovation, you may wish to take out a personal loan to finish the work.
5. Funeral expenses. Most people do not plan for how their funeral expenses will be catered to. This means that the surviving family members have to make a plan when the person passes on. Funerals are an expensive affair and include the cost of transport, funeral director’s fees, the cost of a casket, cremation and so on. If the family can’t raise funds from their loved one’s estate, they can take out a personal loan to cater for these.
6. Moving expenses. Singapore may not be a very big country, but it still costs quite a bit to move houses or offices. In some instances, the move may necessitate the purchase of new furniture as well. With a personal loan, the mover will be able to pay the movers and cover the cost of the move in its entirety. When there is a need to purchase new or additional furniture, the loan can cater to that as well.
Personal loans are easily accessible and can be used for just about anything. In addition, licensed private money lenders offer personal loans even to people with bad credit, provided that their current income can cater to the monthly repayments.
As a licensed private money lender, Katong Credit operates under a strict set of rules laid out by the Ministry Of Law. We understand the urgency of taking a loan to tide you over financial emergencies. This is why we strive to provide you with the loan in the shortest time possible. If you wish to clarify any other issues you might have, you can also speak to us to find out more.
Bad Credit LoanBad Credit Score LoanEmergency LoanFuneral ExpensesHome Renovation LoanHoneymoon LoanLegitimate vs Unlicensed Money LendersLicensed Private Money LenderMedical Emergency LoanPersonal LoanWedding LoanWhat Can I Use A Personal Loan For