Even though people don’t like to borrow money, this is something that can’t be avoided in certain situations. Sadly, most people presume that lending money has only one task, covering up some other debt. When you look at it realistically, this is not what happens most of the time. Usually, people take loan money to invest in a new apartment or a car. Lesser percent of people lend money to invest in a business.
So, it should be said there is a wide array of reasons why someone would look for a money lender. At the same time, searching for a licensed money lender can be a really hard task sometimes since there are so many of them you can find online. Naturally, all of them claim to be legit, but this is not something that happens most of the time.
In order to find a legit money lender, you need to be sure to check some of the moneylender review blogs or sites you can find online. Thankfully, there a lot of them and you shouldn’t have any problems finding them. If you are looking for the best money lender Singapore has to offer, be sure to check out kbbcredit.sg.
One more thing that should be said is that borrowing from some financial institution or a bank is an ideal solution, but a high percentage of people are more comfortable taking a loan from a moneylender since they consider it much easier. Of course, educating yourself before you actually make a decision is an absolute must. This is the reason we’ve decided to provide you with a list of the things you need to be aware of when you borrow money from a moneylender. Without further ado, let us begin.
Maybe you didn’t know, but borrowing money from a moneylender is surely one of the most expensive ways to borrow money. In order to provide you with the right idea of what you can expect, we are going to show you one example. The government provided a set of rules that says they are able to have a maximum interest percentage of 4% every month. When you calculate it for a year, you will get a hefty 48%. However, you should know that there is more. If you fail to make some payments, you will be due another 4% every month.
Also, almost every moneylender will surely ask for a 10% upfront. This is not a rule, some of them could ask for an even higher percentage. So, when you pile all of these percentages you can expect that the cost of you borrowing money from a lender could reach the original amount you’ve borrowed in the first place. You need to be careful about this since this can cost you pretty much if you are not careful. You need to talk about all of the elements of the contract you are signing before you actually sign.
Moneylenders are not Loan Sharks nor Banks
If we were to conduct a survey, many people would be confused about the differences between moneylenders and loan sharks and banks. These being similar is probably one of the biggest myths we stumbled across when we researched this topic. We don’t have any doubt that many people actually think like that. Naturally, you need to check a licensed moneylender has before you actually decide to get into the talks about borrowing money.
We’ve already described what the government legislation about moneylenders looks like. Naturally, you can see that banks have a completely different modus operandi. We are not even going to start talking about loan sharks, this is a topic for a whole another time. Mixing moneylenders with these two would be a huge mistake. Believe us, you don’t need it. Even though you will have protection from the law, you can expect some severe consequences if you are not careful about things you do.
What Happens When You Can’t Pay Back?
When you actually borrow the money from a moneylender, you need to think carefully about the scenarios that you can encounter. Naturally, it can happen that you fail to pay what you owe. Of course, you will give your best to prevent that, but it can happen. If this happens, you can expect from a moneylender to reach out and ask for you to make your payment. Since this is a legal obligation, you are required to fulfill your duty and pay. At the same time, you need to know that the moneylender is within his rights when requesting you to pay the money back.
In case you don’t pay back the money you owe, you can expect from a moneylender to hire some debt collectors who will visit you at your home, where they would collect the money, either in cash or items you have in your home. Naturally, they are not allowed to use force or to offend you. If this happens, you can submit a complaint to your local institutions. What happens later purely depends on the situations that occurred. But this is something you can expect to happen in case you fail to pay back the money you owe.
As we said, finding a legit moneylender is not an easy task. We mean, if you want a sure thing you can check if there is a local city hall moneylender. This is a sure hit, but not all of the towns have it. Before you even think of borrowing money from a lender, you need to be sure you’ve done proper research about all the things that you can expect to happen since you take this action.
Therefore, we’ve provided you with three things you need to be aware of when you decided to borrow money from a moneylender. This is not something you should treat lightly. If you are not careful, this is something that can easily backfire. Even though you are protected by the law and the government legislation, this is a thing that can get out of hand if you are not careful.