How To Settle Debt With A Licensed Money Lender And Where To Get Help When Required

 

Debt settlement is a process by which you negotiate with your creditors to reduce the amount of money you owe them.

It can be a difficult process, but it’s often the best option for people who are struggling to pay their debts.

If you’re considering debt settlement, it’s essential to understand how it works and what to expect.

In this blog post, we’ll discuss how to settle debt with a licensed money lender and where to get help when required.

What Are Licensed Money Lenders?

Licensed money lenders are businesses that provide loans to individuals and companies. To operate, they must be licensed by the Moneylenders Act.

The Moneylenders Act regulates the interest rates and fees that money lenders can charge.

There are two types of money lenders in Singapore: legal and illegal. The Singapore government has approved legal money lenders by issuing them a moneylending license.

On the other hand, illegal money lenders are unlicensed entities that operate outside of Singapore’s laws.

What Types Of Loans Can You Borrow From A Licensed Money Lender?

If you’re planning to borrow from a licensed money lender in Singapore, it’s essential to understand the available types of loans.

Some of the types of loans you can borrow from a legal money lender Singapore may include:

Personal Loans

This is the most common type of loan that people borrow from licensed money lenders for in Singapore.

Personal loans can be used for various purposes, such as medical expenses, home renovations, or debt consolidation.

The interest rates on personal loans are typically lower than that of credit cards, making them an attractive option for borrowers.

However, it is essential to note that personal loans are still a form of debt and should be repaid promptly to avoid affecting your credit score.

Business Loans

Business loans are one of the most popular types of loans that people borrow from licensed money lenders in Singapore because you can use them for a wide variety of purposes, such as expanding your business, buying new equipment, or even just covering unexpected expenses.

Therefore, they can be an ideal way of acquiring the financial assistance you need to grow your business.

If you’re considering taking out a business loan, shop around and compare offers from different lenders to ensure you settle for the best money lender.

Payday Loans

This is a type of short-term loan that you can use to cover unexpected expenses or financial gaps until your next payday.

Payday loans are a helpful way to access quick cash, but it’s essential to understand the terms and conditions before taking one out.

Before choosing a payday loan, shop around to compare interest rates and repayment terms.

When taking out a payday loan, remember to borrow what you can afford and make sure you have a plan for repaying the loan on time. Payday loans might be an expensive form of credit, so use them responsibly.

Renovation Loans

Renovation loans are one type of loan you can borrow from a licensed money lender in Singapore.

They can help you finance your home renovation projects, whether for a new kitchen, bathroom, or any other type of home improvement.

Such loans are a great option if you don’t have the cash on hand to finance your project upfront, and they can help you make your dream home a reality.

Medical Loans

This is a type of loan that you can take out to cover the costs of medical treatment. It can include anything from surgery to dental work, and you can use the loan to pay for private or public healthcare.

The interest rates on medical loans are slightly lower than those of other types of loans. They can be repaid over a more extended period, making them an ideal option for anyone facing hefty medical bills.

Study Loans

These are designed to help students cover the costs of tuition and other educational expenses. Study loans cater to both full-time and part-time study, and you can repay them over a tenure that suits your needs.

Wedding Loans

Such loans can help you finance your wedding expenses, such as the cost of your wedding gown, rings, wedding reception, and honeymoon.

When shopping for a wedding loan, you’ll want to consider the span of the loan term and whether you want a fixed-rate or variable-rate loan.

Bridging Loans

They are commonly used to finance the purchase of a property. The loan is repaid when the property is sold.

Bridging loans may be expensive to finance a purchase, but they can be a valuable option for those who need to access funds quickly.

Licensed money lenders in Singapore can allow you to borrow bridging loans of up to 25% of the buying price of the new property you intend to purchase.

Bridging loans must be repaid within 12 months, and borrowers are required to provide collateral in the form of property or investments.

Bridging loans are an attractive option for those who are confident that they can sell their property quickly, but borrowers should be aware of the risks involved before taking out such a loan.

Debt Consolidation Loans

These loans offer a way for people to consolidate all their debts into one loan, saving them money on interest payments and helping them get out of debt more quickly.

Pros And Cons Of Borrowing From A Licensed Money Lender

Licensed money lenders are a popular option for those looking for quick cash in Singapore.

While they can be a convenient way of getting money when you need it, there are also some potential drawbacks.

The pros and cons to borrowing from a licensed money lender in Singapore have been summarised in the table below:

ProsCons
They can provide fast access to cashThe interest rates are usually high
Offer flexible repayment plansThe loan repayment span is short
The application process is usually quick and easyYou may be required to provide collateral
You can often get a loan even with bad creditYou may be subject to strict repayment terms
You can use the loan for any purposeYour borrowing limit depends on your annual income

What If You Are Unable To Pay Back The Loan?

It is important to remember that if you do not make your payments on time, your interest rate may increase, and you may be subject to late fees.

Therefore, there are various actions you can take to get help from your money lender as licensed money lenders around the clock to provide professional services to their customers.

How To Settle Debt With A Licensed Money Lender

If you cannot repay your loan, the first step is to contact your licensed money lender immediately.

It will work with you to devise a money lender debt repayment plan that is manageable for both parties.

If you are struggling to make your payments, you can consider:

  • Refinancing the loan through Moneylenders Credit Bureau
  • Consolidating the loan through a debt consolidation plan
  • Applying for a hardship programme

Some government assistance programmes may help you if you are struggling to make your loan repayments. These include:

  • CPF Board’s Hardship Scheme
  • HDB Financial Assistance Scheme
  • ComCare Programme

What Happens If You Default On The Loan?

Remember that when you take out a loan, you are agreeing to repay the borrowed amount, plus interest and fees.

If you default on your loan, it means you have failed to make your scheduled payments, which can severely affect your financial well-being.

In Singapore, defaulting on a loan can result in a black mark on your credit score. This will make it more difficult for you to borrow money in the future, as licensed lenders will be reluctant to approve your application.

Defaulting on a loan can also lead to legal action from your lender. It may take you to court to get a judgment against you, allowing them to seize your assets to repay the outstanding debt. In extreme cases, you may even face jail time.

However, there may be alternative repayment plans available that can help you get back on track. Ignoring the problem will only worsen things, so take action today to protect your financial health.

How Are You Protected By Law When Borrowing From A Licensed Money Lender?

In Singapore, there are several laws in place to protect borrowers from unfair and illegal lending practices. Some of these laws include:

  • The Moneylenders Act protects borrowers by regulating the fees and interest rates that money lenders can charge
  • The Consumer Protection (Fair Trading) Act protects consumers from unfair trade practices, such as false advertising and misleading statements
  • The Personal Data Protection Act protects the personal data of borrowers from being mishandled or shared without consent

If you believe you are a victim of illegal lending practices, you can file a report with the police or the Moneylender’s Association of Singapore.

How Credit Counselling Singapore Can Help You

Credit Counselling Singapore (CCS) is a non-profit organisation that provides free counselling and education to those struggling with debt.

This helps them get back on track and achieve financial stability. CCS can help you in various ways.

It works with borrowers to create a budget and establish a repayment plan. It can also help in negotiating with creditors and improve your credit score.

Moreover, if you are facing foreclosure or are at risk of defaulting on your loan, CCS can provide you with the necessary support and resources to help you avoid these consequences.

In addition, it can also offer financial education and counselling services to help you better understand your finances and make better financial decisions in the future.

Other Ways To Get Help

If you are encountering problems with your debt repayment, other organisations can offer you help and support. These include:

  • The Samaritans of Singapore: A 24-hour hotline for those feeling distressed or suicidal.
  • Silver Ribbon (Singapore): An organisation that supports those suffering from mental health issues.
  • DebtCare: A Christian organisation that offers free financial counselling and education.

You can also contact a debt settlement company in Singapore. Debt settlement companies can negotiate with your creditors to reduce the amount of debt you owe.

However, it is vital to be aware that these companies may charge fees for their services and may only settle a portion of your debt.

You may also consider filing for bankruptcy, as it is an option that will allow you to discharge all or most of your debts and give you a fresh start.

However, it will also significantly impact your credit rating and make it difficult to obtain future loans.

Conclusion

Borrowing from a licensed money lender can allow you to get the cash you need quickly and easily. However, it is crucial to understand the pros and cons of borrowing before taking out a loan.

In case you are having trouble repaying your loan, don’t hesitate to seek professional help as soon as possible. If you are struggling to get a loan from a money lender or need some quick cash, contact Katong Credit today for fast cash loans with low interest rates.

With our dedicated customer service, we ensure we offer a solution that’s tailored to your needs. Click here to apply for a fast cash loan today.

Frequently Asked Questions

Can I Borrow From A Licensed Money Lender If I Have Bad Credit?

Yes, you can often get a loan with bad credit from a licensed money lender as long as you have a steady flow of income.

Although the interest rates may be higher, licensed money lenders are more likely to approve your loan even if you have bad credit as compared to banks.

Can I Use The Loan For Any Purpose?

Yes, you can. However, it is essential to note that personal loans are still a form of debt and should be repaid promptly to avoid damaging your credit score.

What Happens If I Default On The Loan?

If you default on your loan, the licensed money lender has the right to take legal action against you, including filing a court claim or sending bailiffs to your home to seize your assets.

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