Every century has its own financial troubles. Today we believe that loans are guilty of every financial crisis we have. Actually, part of this conception is true — mortgage crisis was provoked by mortgage bankers. People start to blame bankers instead of people who get the loan. People who get the loans are not guilty; they don’t realize they can’t pay for their 4 houses and 10 cars. What a surprise! The government applies a lot of precaution measures this crisis to avoid next time. This is the reason why moneylenders have so many limitations and regulations to follow. However, in 2016 moneylenders in Singapore were allowed to provide and to check information for repayment records of borrowers.
Credit reports are available online and every licensed moneylender can check them out. They are able to improve credit risk assessment or to refuse credit to a client. Refusal is needed when the client has too many loans and has not paid them regularly. This online system allows all moneylenders to be responsible lenders. Overborrowing is a real issue and it is really dangerous especially for people who are gamblers, for example. This online system is helping moneylenders in Singapore to make a difference between a man who will be capable of paying his debts and one who won’t be, says Loansingapore.sg. Most people consider that lenders are ready to give a loan to everyone because this is a business but this is a huge misbelief. Imagine that one moneylender gives away all his money to people who will not be capable of paying him back. What will happen with his business? He will bankrupt, of course. Moneylenders don’t have a reason to give loans indiscriminately.
Is this a silly situation to get a loan for?
There is no such thing as a silly expense. If you want to have something and you know you have savings but you don’t want to spend them for this thing, better get a loan. There is no need to put yourself some limitations when you can save your savings for real emergencies. Getting a loan for something that will be sold out after a week or two when you have your salary is not a silly situation. Imagine that you want something but there is no supply for this item on the market — this is a real issue and even a loan can’t help you.
I am still afraid that I am going to get a loan from an unlicensed moneylender. What should I do to recognize licensed from an unlicensed moneylender in Singapore?
Licensed moneylenders are called this way because they have a license (what a surprise) and they pay an annual tax for it. They will want to check who you really are and will require some personal documents. Don’t leave your documents to him. If he wants to keep your documents, take them as quickly as you can and leave his office. However, a licensed moneylender in Singapore will make copies of some of your documents. This is completely normal, and they should give you back the originals. Unlicensed moneylender could ask you for your username and password but giving them such information is not acceptable. Actually never give your passwords to anyone. Unlicensed moneylenders will ask for your ATM card in return for a loan with lower interest rate. Don’t give them your ATM card. They usually take some of your money and give them to other clients and then return them back before interest rate is accrued. This is something like money laundering so you shouldn’t give them your credit card. Actually, if you have doubts that one moneylender is not licensed, you can report him to authorities. It is illegal to assist them.