Getting a loan in Singapore is a pretty straightforward process if you go through the right channels. Lending institutions include banks and moneylenders, amongst others. Moneylenders make up a small percentage of the official institutions authorized to grant loans, but moneylending is a thriving business, and you can go and borrow money from them. First, you have to find out if they are licensed from the list of licensed Singapore moneylenders.
Next, you have to ensure that their business is transparent and above board because even the licensed moneylenders can be a bit shady. They should explain the terms of the loan contract clearly to you, and even give you a copy of the contract. They are to your contact details and follow up on them by calling you or sending you an email to confirm that you are who you say you are and confirm your request for a loan. If they try anything unethical, like keeping hold of your ID card or giving you a blank form to fill in place of the contract, report them immediately to the authorities.
Before you are granted a loan, however, you need to make sure that you are aware of all the interest rates and fees that you will be charged when you borrow from moneylenders.
After you have been granted the loan, you still have to take steps to ensure that you de not cheated on your loan.
- As you collect your loan amount, make sure that the moneylender gives you the right amount if principal for that loan. By law, moneylenders are expected to charge a fee of not more than 10% of the principal loan when the loan has been granted. Make sure that they have deducted exactly 10%, and nothing more.
- Make sure that you pay back the monthly loan installments on time. Doing this will steer you away from late payment fees and interests charged on late payments. By law, moneylenders are allowed to charge you a fee of S$60 (and nothing more) for each month that your payments are late, and a 4% interest rate on each month that your payments are late.
- Every time you pay back a loan, your moneylender has to issue you a receipt, duly dated and signed. This applies to all fees that you pay in cash to the moneylender. When you get the receipt, make sure that everything is in order, such as the names, amount, date, and signature.
- At least once every six months that you have taken this loan and are repaying it, you should receive a statement of account for all your loans. These too you should check for any irregularities and make sure that everything is correct.
- Keep all receipts and statements of account as evidence of payment.
Loans in Singapore are very flexible, meaning that you can use them to do any number of things. You can pay for your tuition, get a car title, make a payment on a house/apartment, or even use it to take a vacation with your family.