When surfing the internet – given the ease with which it is possible to be contacted and “enticed” with promises of high returns through e-mails or advertisements that appear during navigation (banners, pop-ups) – it is important to always keep the eyes open and be a little wary. Even if we intend to invest only small amounts of money or to “try just once” to see how one of the many online trading platforms available on the internet works, we must pay the utmost attention, because it is not always easy to go back and recover the money we already paid.
There are alarm bells that can make us think that whoever offers us the loans is not authorized. When you have financial problems, it’s human to look for the simplest solutions. This is often when you notice the ads for credit loans Singapore. They promise us easy money without going through a credit check, but beware!
THE TRUTH ABOUT CREDIT LOAN FROM AN UNLICENSED MONEYLENDER
The fast-growing money lending industry in Singapore is growing. Even if a law has been passed to regulate them, some lenders still have questionable practices.
A credit loan is money that seems easy to borrow but comes with very high-interest rates. Which makes its reimbursement very painful.
How to recognize quick loans?
In Singapore, more and more companies are specializing in “quick money”. And they are not very subtle. Their advertisements are flashy and their posters, very colorful. “Quick cash in 1 hour”, “Quick loan without questions”, “Express money”. etc. You have surely seen slogans like this before.
Quick money lenders promise you small amounts of a few hundred dollars, deposited directly into your account, without you having to go through a credit check or provide any paperwork. And it all happens very, very quickly. Bye-bye, the wait, hello money!
It sounds too good to be true. Indeed, quick money doesn’t have all the good points as it could be a scam.
Who is a quick loan for?
The people targeted are those who don’t want to reveal their credit rating, because it’s not very good. This is often the case with people who have a lot of debt, who are used to paying late, who have gone bankrupt or have a consumer proposal.
They know that if lenders look at their credit report, they will be considered “at-risk”. For them, quick loans are a last resort and these people are the perfect suspect for the unlicensed money lenders to target.
How to find a credit loan offer between serious and honest individuals?
Finding a serious and honest lender cannot be improvised. It is necessary to prepare your request and to follow some simple rules:
- request a loan between individuals on a specialized platform;
- prefer platforms that have a storefront and whose reliability has been demonstrated;
- Check the legal notices on the website.
Outside the platforms, the process must be even better prepared. You can learn more in forums and social media, or ideally get a recommendation from family and friends.
And how does it work?
Credit loans fall under the category of private loans. In exchange for certain personal information (such as your social insurance number, a check stub, or a bank account number), they agree to grant you a loan.
We are talking about small amounts here: between S$ 250 and S$ 1,250, although some go as far as offering loans of S$ 5,000. In general, the amounts offered are therefore not high. Interest rates are minimal. They can reach up to 2% to 3%! Plus, you get the time according to your convenience to repay your loan.
Also, be aware that the Ministry of Law Singapore has amendments to better protect consumers in matters of high-cost credit contracts, in particular. It now requires a lender to check if you can repay it before you take out a loan.
5 signs of a trustworthy lender
There are some simple ways to rule out that the financial or company that grants the credit loan in Singapore involves you in a scam. The following are good signs:
- – It has a good reputation on the internet
No matter what you are asking for a loan for, do not give in to the rush and take your time to google the reputation of the company from which you will apply for the loan. Check the background of the company and the opinions of other users; if most are good. Also, remember that the financial entities that lend money should ideally be included in the Ministry of Law Singapore. Enter the web pages of these institutions and you can consult the registry from the internet, free of charge. You only have to have the name of the company or financial company that you are “investigating”. You can also verify the company that offers telephone and face-to-face advice, free of charge.
- – Offer “moderate” sums of money or according to your ability to pay
A reliable lending company takes its precautions and is transparent with its clients. If you approach them for the first time, in addition to reviewing your credit history, it is expected that they will offer you only the minimum, in this way they ensure that you will have the ability to pay, and they will start a relationship with you to increase the amounts and improve the conditions of payment on future loans. They will not promise to “get you out of the credit bureau”, as that is impossible since invariably all loans and credits (whether they are paid on time or not) are reported to the Bureau.
- – It does not ask you to sign contracts or make agency payments BEFORE applying for the loan
A reliable company knows that you ask for money because you do not have it, so obviously it will facilitate the conditions for you to obtain it quickly, but it will NOT charge you before giving you the loan. Although there are management procedures, they will be fast, and they should never “condition” you to pay “fees”, “insurance or opening commission” or any deposit before knowing whether or not you will have the credit authorized. If you provide any personal information to carry out any procedure, a reliable lender will give you a reference or procedure number for future clarification.
- – Check your credit history but do not ask for private details
Reliable lending companies review your credit history in a credit bureau or circle, as a procedure, but they ask for your authorization in writing, and they also verify public information. They do not ask you for keys or passwords at any time.
- – It clearly explains the date and amount of your payments
When opening credit or obtaining a loan, a reliable company will offer you free financial advice to guide you in any doubt; but in addition, it will explicitly show you how your payment scheme will be: the frequency with which you decided to pay and the amount that corresponds to each term, as well as the interest generated. Remember that just by comparing options you can save more than S$ 3,700 in interest.
How to avoid this type of fraud?
So that no one else is in the same situation, it is necessary to be cautious and look for the clues that indicate that we are facing fraud. For example:
- The person who places the ad offering the loan always sounds unprofessional & will create pressure on you to apply for the loan.
- They only provide us with her name and her email account as data. Also, the email account is from a free domain (Yahoo, Gmail, Outlook,?).
- The received emails have spelling mistakes and include expressions obtained from an automatic translation system.
- The amounts offered to lend can be very high.
- The interest they ask in return is minimal, 2% or 3%, so they do not suppose any benefit for the person who supposedly makes the loan.
- They ask for money in advance, excusing themselves in management expenses, loan insurance, or the like.
- The money is sent to another person and through an online payment platform.
- Some inconsistencies can make us suspicious. In this particular case, the person and the bank involved in the loan are assumed to be from a different country, but the contract is written in a different language.