As you may know, a moneylender is a group or a firm that lends out money that must be returned shortly, though at somewhat high interest rates. They can get away with these rates thanks to the fact that lending isn’t the same as handing out a loan at a bank.
Instead, moneylenders prey on citizens with bad credit scores or little to no funds. It’s this way they can make a lot of money back thanks to interest fees and other charges.
However, it should be noted that most moneylenders have limits on how much they can give out, to prevent them from taking too much advantage of their “victims.”
Again, it’s important to note that a moneylender isn’t a bank. Banks give out loans, which are based on a variety of factors like credit score and an initial amount in an account.
Generally, people approach moneylenders when they need funds for a wedding, a house, or some other sort of big purchase.
Moneylenders in Singapore
In Singapore, moneylenders have to register with the Ministry of Law (MinLaw) if they want to be considered as such. From there, moneylenders have to adhere to specific rules to continue having a license, such as how much they should lend out, their interest rates, and more.
However, it should be noted that there are a decent number of loan scams in Singapore as well, considering they have been around for a good amount of time and have learned what to tell people to get them to believe their lies, or, at least, how to sell them on policies they don’t need.
For more on these types of businesses in Singapore, check out the Money Kinetics’ Guide to Licensed Money Lenders in Singapore for an in-depth look at what you’re dealing with while there.