Borrowing from a Money Lender: How to Avoid Loan Scams
Borrowing from a money lender in Singapore is a huge decision in every sense, and you would not want to be at the receiving end of a scammer.
Usually, one turns to licensed moneylenders when they need quick, legal financial help. But, with increased cases of loan scams, much caution has to be taken. Some money lenders come dressed as licensed money lenders, and once you are not careful, you lose more than you bargained for.
However, do not worry. In this post, we’ll offer you awareness and help you spot the signs of a scam to ensure you transact with a licensed lender.
Below are some simple but effective ways to protect yourself.
1. Always Verify the Moneylender’s License
First, check the money lender’s license. Every money lender in Singapore must be listed on the Ministry of Law. You will get a list of licensed money lenders on their web portal. It should raise many suspicions if any lender is not on this list.
Usually, scammers come with lots of professional-looking websites or forged documents that are meant to deceive. Also, they may say they are licensed, although they are not on the ministry of law listing.
Therefore, if their details are missing from the registry of money lenders, don’t take that for granted. Instead, immediately move away or report them to authorities.
2. Beware of Unsolicited Offers
Most likely, a scammer approaches somebody with an offer for loans without reason. For instance, in Singapore, licensed money lenders are prohibited from advertising and offering loans through SMS, WhatsApp, and even phone calls over social media.
Therefore, if any such popping up, one can be sure it is almost close to a scam.
Mainly, every legitimate money lender only advertises their services on business listings, websites, or even real offices and thus does not solicit your business by unsolicited mail. Therefore, if any “moneylender” cold messages or cold texts you, delete and block them outright.
3. Never Give Away Your Personal Information Ahead of Time
Scams will further ask you to provide personal sensitive information, like NRIC, bank account details, or sign-in particulars, even before sanctioning any loan deal. Mainly, refrain from answering such requests whatsoever.
Although a licensed money lender can also request such items, all are by appointment in their offices and your personal attendance since the closure needs your signing at an office for the said purpose of the loan contract with mutual agreement.
Therefore, anybody who forces you to reveal confidential information via the Internet or over the telephone call is a fraud, and you shouldn’t yield to their request
4. Avoid Offers that Sound Too Good to be True
Scammers love promising ultra-low interest rates or guaranteed approvals. The thing is, responsible lenders play by the rules. They must check your financial status and ensure you’re in a position to pay the money back before approval. Run if anyone skips this part and says, “Don’t worry, you’re approved!”.
Also, watch out for those lenders who ask for an upfront payment or “processing fees.” A licensed moneylender does not ask for any upfront payments. They deduct the fees from the amount borrowed
5. Read and understand the Loan contract
Read the loan contract before you sign. The contract entails the amount borrowed, the due date of repayment, the rate of interest, and any other associated fees.
While going through the contract, do not hesitate to ask questions if a situation or transaction feels wrong, even if it makes sense.
A licensed money lender must explain your loan conditions in a language you understand.
Notably, if someone rushes you or gets impatient when you ask questions, that is a warning.
6. Trust Your Gut
Sometimes, your instincts can be the best defense.
Therefore, if something feels off, whether it’s the lender’s behavior, their cooperation style, or the terms they’re offering, listen to your gut and reconsider.
Final Thoughts
Not falling prey to scams is not about being smart; instead, it’s all about taking responsibility for your future financial security.
Therefore, be watchful and follow the above tips to confidently navigate through borrowing in Singapore. Also, you can contact us for guidance in case you need a loan from a legit money lender.