Money lending has become a practice that’s been done more with each year that passes. The economy keeps changing, and so do technology, people’s mentality and needs. Most people are in need of a home, a car, or other similar things. Therefore, they decide to borrow money. But, this is where the problem appears. How do you recognize a legal money lender? What else is there to know about money lenders? And what is a credit company?
What is a Credit Company?
A credit company is an institution that provides credit. This refers to any entity that offers loans, or any kind of long-term or short-term financing. If licensed, they function under the rules and regulations of the country. A credit company and a money lender both lend people money, so the risk for scammers is very high in both cases. The difference would be that the credit company works on a larger scale than the lender. The regulations are also stricter, and can provide larger and more structured loans.
But, the biggest similarities between the two, is that the scammers can be identified using the same tips and tricks. As they both take the risk of borrowing to people, but have to then receiving back; there are many copycats for both. As example, if you’re looking for a credit company in Singapore, know that there are a lot of fake ones. This is exactly why it is so vital to know how to identify them.
Identify the Legal Money Lender
More and more people find themselves in the position of wanting or needing to borrow some money. While, at first, it might seem like a good idea to borrow from a random lender, a legal one gets the job done while having lots of other advantages.
- Legal – The fact that your rights are protected by the law is one of the things that allows us to live peacefully. This applies here too, as what you’re doing is regulated, and you cannot get scammed.
- Transparency – An illegal money lender will lie about the interest rate, or the time you have available to pay back, and so on. They will do everything they can to exploit the borrower.
- Responsibility – Both parts have responsibilities, and are bound by a contract to respect them.
A lot of money lenders that are not legal, will pretend to be. But, don’t let yourself be tricked, as you can check if they are legal or not! Most countries require money lenders to be authorized, and in countries like UK or Singapore, there are public lists with the licensed money lenders. As an example, you can check the legal money lender list on the Monetary Authority of Singapore (MAS) site, and for the UK, you can check the Financial Conduct Authority (FCA) site. Search up the list for any country you’re interested in, as there is a big probability that it exists. Try something like ‘legal money lender in …’ and add your country!
What Exactly to Look for?
Besides checking the government given lists, there are other things you can do too. As mentioned, look for transparency. The legal money lender in Singapore will have all the information clearly explained. Everything should be easy to read and understand for everyone, without any kind of unnecessary words. Vague explanations should be your sign to run, as this is exactly what will make you lose money later. Clear communication is what you should look for.
The interest rate should not be extremely different compared to other lenders. Legal lenders have to respect certain guidelines set by the government, and those concern interest rates too. Check the interest rates of different money lenders in your area (for the same type of loan); and if there’s a lender with a lot higher rates, it is probably a scammer.
Marketing and physical presence are the last two things that you should keep in mind. If it sounds way too good to be true, there is probably the case. Avoid places that do not need to see you in person, or that use terms like ‘approval guaranteed’. A lender that tells you that your credit, salary, etc. is important, is the lender that you will actually be able to work with. As for the physical presence; most people prefer to fix every problem from their phone, and do not want to go to the money lender physically. But, scammers don’t usually have an office. Which means that going there physically, is one more precaution.
What to Avoid?
You know what to look for, but knowing what to avoid is at least as important. You might know that when looking for mushrooms, you should collect the red ones, but you don’t know that the red ones with white dots are poisonous. Going from this analogy, you should know to avoid:
- Little to no documentation – Never go for verbal agreements, or contracts that leave a lot of information out. The scammer might then claim that there were some additional fees that were ‘discussed’ but you just don’t remember about them.
- Upfront fees – Real lenders do not require any kind of fees before lending the money. You might be asked to pay some upfront fees, and be ghosted or blocked after.
- Pressure – Someone pressuring you into something is never good, and it’s not good here either. If the lender is insisting that you sign quickly, that you don’t fully read the documents, or so on, it’s probably a scam.
- Unsolicited offers – Simply put, money lenders that are certified never sent loan offers.
Following these simple tips should be enough to get rid of scammers when trying to choose a money lender from UK, or a credit company in Singapore. Why is that? Because scammers act approximately the same to matter the country!
Conclusion
After you checked the lender on the government list, you should be able to find the best legal money lender in Singapore! That’s how you make sure that your lender is not a scammer, and you should do that before borrowing! Do not rush, and do not let yourself pressured. Borrow money safely, so that you can use them, and pay them back exactly as you agreed with your lender.
