There are essentially three ways to borrow money in Singapore. There is the conventional way of applying for a loan with one of Singapore’s banks, using an authorised money lender in Singapore such as Fast Money, or using unlicensed sources which effectively equate to borrowing from loan sharks.
The third option of borrowing from loan sharks should always be avoided, given the steep interest rates charged and the potentially severe repercussions for you and your family if you fail to repay the loan. In this article, we sum the major advantages and disadvantages for each of the options to help you make informed decisions when it comes to borrowing money in Singapore.
Restrictions with Banks in Singapore
On 1 June 2019, the Monetary Authority of Singapore (MAS) imposed tighter regulations regarding the borrowing limits for personal loans, especially any unsecured credit. The laws, although applicable to everyone, are more relevant to those looking to borrow money in Singapore from the country’s banks.
The banks themselves conduct stringent checks on foreigners in the country who are looking to take out loans, with strict criteria to be met. For this reason, using an authorised money lender in Singapore is not only more appealing but also the only viable alternative when it comes to paperwork.
What is the Difference between Authorised Money Lenders and Loan Sharks?
The difference between an authorised money lender in Singapore and a loan shark must be recognised if you are looking to borrow money in Singapore. The Singapore government ensures that licensed money lenders operate to a strict code of conduct. There are restrictions on the amounts that can be borrowed -– 6 times of monthly salary currently 12 times your monthly income – and the levels of interest that can be charged, as well as any fees that can be applied to loan such as processing fees.
The licensed money lender will also ensure that you understand the terms of the policy fully and more importantly, guarantees that any personal information that you provide is protected. They will never try to coerce you into taking a loan that perhaps you don’t need or can’t afford, and you won’t be bombarded with phone calls or emails as well. Altogether, legal money lenders are more professional than loan sharks. You can check if your money lender is licensed in Singapore by checking out this page.
As unauthorised money lenders not subject to any of these regulations, they can effectively offer loans at terms that suit them. An additional way of checking whether a company is legitimate is by comparing the loan fees, the levels of transparency and the interest rates charged with known authorised lenders or banks in Singapore. If they are vastly different, the chances are that you have been dealing with a loan shark.
How Fast Money Can Help
Regardless of your financial situation, you should never go to a loan shark as the consequences for both you and your family could be devastating. Always look for credible and authorised money lenders in Singapore. At Fast Money, we have a range of personal loan options available that are designed to suit your personal circumstances at rates that you can afford. Please contact us for more details about how we can help you.