Licensed moneylenders provide short term loans to borrowers who are in quick need of having money. Unlike traditional banks, private investors finance the moneylenders.
If the question arises, “Do Moneylenders need to be licenced?” Here is the answer we are going to discuss with the benefits of money lending from licensed moneylenders.
- Professional way of debt collection:
If you borrow money from unlicensed moneylenders, there are high chances that their debt collection method will be unprofessional. It has been seen that unlicensed and illegal moneylenders harass their clients if they cannot pay back on time. Unprofessional moneylenders can harass the clients in very different ways, which includes mental torture by continuous calling, receiving threats and this can go beyond the limits. On the other hand, licenced moneylenders have a very professional way of money collection. If the borrower cannot pay on time, they have planned alternatives, well elaborated in the contract. The delayed payment might have involved penalties, but it is better than getting harassed and mentally tortured.
- Interest Rate:
Borrowing money from a licensed moneylender is beneficial in interest rates. As the licensed money lending firms are government-controlled, they cannot charge you an interest rate of more than 4% per month. Also, the documentation and all the terms and conditions are very transparent. They are validated and controlled by legal officers. On the other hand, unlicensed firms are not definite about their interest rates, because there is no restriction of government, and no government official cross check the contract. So, the rates are much higher than standard rates, which will put a lot of pressure on the borrowers.
You can always check licensed moneylenders’ status and interest rates online and check their visibility on government portals.
- Realistic Contracts:
An Illegal or unlicensed moneylending firm will present you with a contract, which will be very good to be true. You might find their conditions very liberal, and this can be their way to lure you into borrowing the money from them. A licensed firm will always present a realistic contract, which may not be very liberal or interesting but practically strong. You should always read, check and believe on instincts before signing the contract papers. As the terms and conditions in their contract look best and may be portrayed in a very easy-going manner.
- Loan Terms and Conditions:
The Registry of moneylenders restricts a licensed firm to present you with very clear and simple terms and conditions. Registry also gives them instructions to elaborate everything to you regarding borrowing and returning the money. On the other hand, unlicensed or illegal firms play with the mind of borrowers by presenting complex and troublemaking terms and conditions for them. There may be many points, which they do not prefer to add in contract, as these points might ruin their plan to exploit the borrower.
- Contract signatures:
A licensed firm will give clients a contract to sign, well elaborated and written by a legal officer. It will include every detail about the loan, rates, loan maturity, repayment procedure, penalties etc. Any government body does not bind an unlicensed firm; hence, the contract papers are not authentic and informative. It may lead a borrower to problems in future. Also, the terms and conditions presented to you will be in a language that won’t be clarifying. They may ask you to sign incomplete documents and bare contracts, which is not to get in.
- Physical Office:
A licensed money lender needs to have a physical office. The application process may occur online, but the client has to visit the physical office while signing the contract. Also, borrowers have a place where they can visit and consult personally. But unlicensed moneylenders may not be comfortable giving you the physical address as it might be dangerous for them to run such a business and face clients in person without the involvement of law.
Conclusion:
All the reasons are certainly enough to answer the questions and CRAWFORT PTE. LTD. are certainly the most authenticated moneylenders in Singapore. These reasons imply that Moneylenders should be standardized and have a very decent and government restricted way of dealing with clients. Hence, Moneylenders should be licensed. Borrowing from an unlicensed firm may lead to unwanted pressure in the mind of borrowers.
