It is an unfortunate reality that financial scams are more sophisticated and harder to detect than ever before. If you need a loan, protect yourself and your family by learning how to distinguish between a licensed money lender in Clementi and an unlicensed one.
Finance in Clementi
The population of Clementi is currently just under 100,000 people spread across over 25,000 homes. It is projected that there will eventually be around 40,000 homes in the region. With that increase will come a parallel surge in the number of residents and, consequently, a demand for financial services.
Clementi is already well-served by all the major banks, including DBS, OCBC, UOB and Maybank. Their branches are clustered around the Clementi Mall area. Since it falls outside the Central Region, property prices and median income in Clementi are on par with the national average.
That does not mean that scams are uncommon. If you need a money lender in Clementi, make sure they tick these 5 boxes.
1. They perform a credit check
A credit check is an assessment of your credit history and current credit rating. It determines your eligibility for a loan as well as the interest rates that will apply uniquely to you.
Unlicensed money lenders know that individuals with a low rating may find the process uncomfortable and perhaps even embarrassing. They exploit this by offering credit check-free loans to entice the vulnerable. However convenient this may seem, it is illegal.
If a Clementi money lender is willing to flout the law at the very first step, they are most likely unlicensed and illegal. Some licensed money lenders may also make this offer. In their case, it is an unethical practice and you will find that the same attitude pervades their entire business.
It may be slightly uncomfortable but you should only trust a money lender that performs the full range of checks.
2. They don’t solicit
Almost every Singaporean has received WhatsApp messages offering them personal loans, often from non-Singaporean numbers. You may also have received such ads via email or on social media platforms. They are all indicative of an unlicensed money lender.
By law, licensed money lenders are only allowed to advertise their services on their official website, outside their physical place of business, and in consumer and business directories. If you see personal loan offers anywhere else, you are dealing with either an illegal lender or a licensed but unprincipled one.
Note, you may receive offers for loans from a legal money lender in Clementi through other channels if you have borrowed from them before.
3. They have a physical office
The loan application process is a legal procedure that involves document checks, credit rating assessment and identity verification. Each of these steps is best performed in a sober environment for both your protection and privacy. A licensed money lender in Clementi will always have a physical office you can visit.
An unlicensed money lender is not a registered business and will not be able to open an office. Take note that some scammers try to circumvent this by using the premises of another business. Always check that the office is actually that of a licensed money lender before you sign on the dotted line.
If you are given an address, simply look it up on Maps. Registered businesses will appear as official business listings. You can verify them at the Ministry of Law website.
Remember, an informal meeting at a coffee shop near your home may be convenient but always insist on completing the paperwork and formalities at the money lender’s place of business.
4. They have a secure website
Look at the address bar of the browser where you are reading this. At the start of the URL, there are 5 letters which indicate it is a secure website: https. The ‘s’ stands for ‘secure’ and the letters are accompanied by a closed padlock icon on their left.
A secure website encrypts all information that is sent via third-party servers on the internet. This minimizes the odds that your personal information is accessed by anyone other than the intended recipient.
Use these 2 indicators to verify if a website is secure:
- The URL begins with ‘HTTPS and not just ‘HTTP
- There is a padlock icon on any page that asks for personal information
This is essential not just for money lenders but also for other financial institutions as well as e-commerce sites. A good Clementi licensed money lender will always use a secure site to protect its clients.
5. Their rates are reasonable
‘Reasonable’ lies between ‘too good’ and ‘atrocious’, both of which are warning bells that you are dealing with an illegal money lender.
Some illegal lenders try to entice Singaporeans into borrowing from them by offering very low interest rates. This is a ploy to induce you to commit to a payment plan rife with hidden clauses. In certain cases, the entire process is the facade for a scam to get your personal details.
Others obfuscate their contracts with excessive jargon and wordy paragraphs so you are disinclined to read through them. However, the devil is in the details and many borrowers eventually discover that they agreed to terms which they did not fully understand.
Singaporean law caps interest rates from licensed money lenders at 4% per month. Anything higher is automatically illegal. Licensed money lenders may offer marginally lower rates to remain competitive.
The Bottom Line
Unlicensed money lenders are constantly trying to find ways around the system and lure unsuspecting Singaporeans. They may adopt one or more of the five features above to imitate a licensed money lender in Clementi. A legal lender will meet all these criteria and offer great service as well.
Protect yourself by staying informed. Keep abreast of the latest finance-related news and government updates from the Monetary Authority of Singapore.