Legitimate Money Lenders: How can you tell?

They come in different shades and characters. Money is a scare commodity any day everywhere, so when you are in need and come online in search of lender, you have to take extra care so that you will not end up in the wrong hands. Yes, you must ensure that money lender that you are approaching is the one that has some measure of credibility in the notch, the service providers in that category are few. So how do you know the best Payday Loans service provider that will serve your best interest? The tips will be of help:


There should be an open discussion of the terms of the loan. It is mandatory that the money lender speak in a language that you will understand, He is expected to make sure that you understand all the terms of the contract before you sign the contract. He should be fair to you in all respects. It is expected of the moneylender that he explains and discuss the interest rate with you, the payment options, as well as how long it will take the loan to be repaid. If part of or all we have said above is missing; please look for another lender.

Your Income Determines the Loaned Amount

The amount that you can be given as loan is determine through the calculation of your annual income. A revision of the amount was carried out by the Registrar of Moneylenders in Singapore in 2018. It stipulates the limit to which you can borrow. If you come across a money lender that says he can bend the rules to allow you borrow more; it is a sign that you are dealing with the hawk. Do not go by any arrangement that will pitch you against the laws of the land.

Details of the Loan Contract

You will need a loan contract which is prepared by a lawyer. The concerned parties must append their signatures before it becomes binding on all. Below are the details of the contracts: Loan amount

  • The interest rates
  • Repayment options
  • Repayment period
  • Late payment penalties

Where you find a moneylender willing to send you money without a contract, you are dealing with a dubious moneylender; he should be avoided. Be sure to examine the contract; get a lawyer to clarify things out for you. Some dubious moneylenders will go all the length to prepare very long contracts and will insert their portions unknown to you. Guard against such.

Amount of Interest Rate Charged

Did you know about the ceiling of interest that you are required under the law to pay for your loan? There is a guideline that specifies all that. The legal and licensed moneylenders do not have the power to dictate the interest rates. The Law Ministry in Singapore has set the ceiling at out that the lenders cannot charge above 4% monthly interest on any principal amount.

The quoted interest rate reveals should reveal to you the sincerity of the money lender. Some dubious ones charge as high as 40% or above in interest on the principal. You must not agree to anything above 4% on the principal as interest.

The Applicable Fees

There are three types of fees that the Licensed moneylender can charge you under the law. They include:

Upfront service fee

Legal fee

Late payment fee

The lenders must not charge over $60 per month for a late payment fee. It will accumulate on a monthly basis. The upfront fee is not more than 10% of the loan’s actual value. In the event of a court dispute over the loan, then the borrower will foot all the legal fees involved.

If a moneylender is asking for extra fees, it is a clear signal that you are in a dubious deal. If a licensed moneylender goes beyond the expected fee limits as stipulated under the law, then he will be liable to prosecution in the law

The positives above are all the elements of a genuine moneylender. Be on the lookout for such before you sign the Payday Loans.