In this article, we are going to talk about how to identify which lender is legal and which is illegal in the market. Also, we are going to talk about how they operate, how illegal ones trick us, how to deal with illegal lenders.
What is a loan recovery?
Loan recoverer also called Ah Long in Singapore, are those people who are hired for amount recovery. This means that these people are appointed when the borrower has defaulted and not repaid. They will first give warnings to the borrower, and if they ignore them, they will send these loan recovers.
They will seize all the financial assets which belong to the borrower to meet the loan amount. Then they will take only those assets which make up the amount of loan taken by the borrower. As a borrower, you should make sure to know about what are loan recovery and take precautions. This means that you will have to save money to pay the EMI to the lender.
The first thing is that a licensed moneylender is an important thing in Singapore. That is because people like to get almost instant cash on their hands without any extra trouble or cost. Many people tend to get a loan from the bank if it is not that urgent. At the same time, people prefer to come to these lenders if there is an emergency or they need the funds immediately.
The lenders do not have a strict restriction or time-consuming process for approval. At the same time, the process which is followed by the bank will take at least one day to complete the process. There is an unlicensed moneylender also who will take a huge amount of interest and might run away. This has happened to people before, so they have created agencies to prevent these kinds of fraud.
How does legal and illegal moneylender operate?
The first thing before you take a loan is to check whether the lender is certified in the market or not. The easiest way of doing so is to go on the Ministry of Law’s (MinLaw) website and search for them. Or there is another way that is to ask your family, friends, or other loan borrowers.
The different way will take a long time to check the internet that is reviewed and also checking the site. They will behave in such a way that it is time for you to call the authorities and let them know. Here is the list of the behaviour of fake lenders who are present in the market.
- They start to be more aggressive and threatening.
- They start to abuse you with foul and demeaning words.
- This means that a fake lender will not let you go over the terms and conditions.
- They will provide you with a loan without any proper loan requirement procedure.
- They will ask for a copy of your ID to keep safe with them.
- They will give you loans that are too good to be true in the market.
Which are the signs that tell us if a lender is legal?
There are also certain things that a borrower should look for in the moneylender. These are the little things that might give a person a hint about they are legal or not. These things are a must to have with each of the lenders to check if they are legal or not. Here is the list of things that a legal moneylender should have and show to other people.
- The legal moneylender will ask the borrower to meet face to face for dealing.
- The borrower is asked to provide a housing address, evidence of income, and also payslip for the last three months.
- A professional lender will ask you to give your credit score for them to analyse.
- Some of the lenders will ask for a pay slip which is evidence that you are not lying.
How do illegal moneylenders trick us?
Moneylending is a business opportunity for these scammers of illegal lenders. A borrower must be vigilant and select the lender more wisely and carefully. The legal money lender is not allowed to advertise anywhere outside of the approved place.
A legal lender can advertise on their website, on the walls near their office, and also in other places. If you find any offer made through SMS or phone call, then it is a red flag which means a scammer. Here is a list of key thing which can save you from falling in these tricks.
- They will try to copy the numbers and also the style of the legal lenders.
- They will offer promotions and offer different things with copied numbers.
- They will copy the same SMS format of the legal lenders, just make some changes.
- They will have the same process, but you can skip a few of the documents on their website.
- They will have a high rate of interest and will keep it as a hidden charge till the end of the term.
How to identify a legitimate moneylender?
The moneylender will provide all their customer with a personal loan SG. This is because they are permitted to distribute only personal loans to the normal public. You can also check the legitimacy of a lender on the MinLaw official website. Here is something to identify a legal moneylender who is there in the market.
- They are not allowed to advertise their service through email or by phone call.
- No loans can be offered or signed on the phone by the moneylender and the borrower.
- Licensed lenders will never use mobile numbers in their advertisements.
- Licensed lenders will call the borrower to a meeting to discuss face to face.
- They will never collect or ask for payment information from the borrower.
- The interest rate and other charges are paid by the lender himself, not by the borrower.
- They will contact you for repayment using a message or mail and will never come to your door.
- If you are having trouble in repayment, you can ask them for an extension which they will approve.
- A false or illegal lender will take some time to process the data while legal is done within 2 minutes.