4 things to know about moneylenders credit bureau 


Before getting a loan, there are a few things in mind that you have to consider and know. Recently, the Ministry of Law in Singapore launched the Moneylenders Credit Bureau (MLCB) on March 1, 2016, in an attempt to centralise information about all loans applied for, taken, or repaid through licensed moneylenders in Singapore. Access to this information is restricted only to the Ministry of Law, the Registry of Moneylenders, borrowers, and licensed moneylenders.

So who is going to benefit from the formation of MLCB? Well, it is a win-win for both parties. Moneylenders now have enough information to review the creditworthiness of a loan applicant, while borrowers have to avoid borrowing beyond their limit – which actually helps them to improve their credit rating. Whether you are a borrower or a lender, you may have a number of questions about the Moneylenders Credit Bureau, including how it works, and how it might affect your credit rating. So here’s a little 101 for you.

What is the function of the Bureau?

The MLCB collects information about loan applicants or borrowers from the licensed moneylenders in Singapore. It is mandatory for all licensed moneylenders in Singapore to be a contributing member of the MLCB. They provide the bureau relevant information about their borrowers and loan applicants. The MLCB, in turn, helps a licensed lender with information about any borrower or loan applicant, so that they can make an informed decision about the creditworthiness of the applicant.

What does a borrower credit report contain?

All contributing members or licensed moneylenders need to submit a borrower credit report to the MLCB. The report should include the following information:

  • Type(s) of loan(s) taken or applied for, tenure of the loan, the principal loan amount, and total amount payable
  • Details about the borrower, including name, Number or Unique Entity Number (UEN), and Identity (ID)
  • Information about the borrower’s all active loans taken from licensed moneylenders, payment and repayment status of all loans
  • Details about the guarantor or surety of any loans

Both borrowers and lenders (contributing members of the MLCB) can access this report in order to make an informed decision about borrowing or lending. Borrowers need to pay $1 for each report, while licensed lenders can get the report for only 50 cents. Typically, a borrower credit report is updated real time; however, information about the latest repayment is usually updated on the next working day.

How to calculate a borrower’s total amount payable?

It’s simple. You need to add the borrower’s outstanding amounts from all active loans with their approved in-principle loan amounts in finding out their total amount payable.

How they rectify incorrect information in the credit report?

Once any discrepancy is reported, the MLCB takes the below steps:

  1. They discuss the matter with the moneylender(s) from whom the allegedly wrong information was received
  2. After a thorough investigation, they provide an update on the matter within three working days

One important thing to note: If an in-principle loan was approved but still pending the final approval, it would still be considered as an active loan. If you applied for any such loan, it could affect your total outstanding principal amount, until the loan application gets rejected. So it is advisable that you should ask your moneylender to dispose of any application for loans that you no longer need.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/09/26/4-things-to-know-about-moneylenders-credit-bureau/

via Financial Directory Singapore


5 tips to get out of debt


It often happens that after you graduate, you get a good job with a fat paycheck. You waste no time in living the life you’ve dreamt – a posh flat, classy clothes, expensive meals at the best restaurants, gym memberships and so on. However, you could get tempted into overspending, or even lose your job, or suffer losses in investments made. After all, nothing is guaranteed. Multiple debts from banks, if not repaid on time, can get you into a serious problem. Read on to know how you can get out of such a situation.

Know your actual income

Take stock of your in-hand income, apart from your gross income and income after taxes have been paid. It is necessary to know the actual value of money that gets deposited in your account every month. Settle a monthly repayment amount keeping in mind this value.

Make a monthly repayment plan

You know your total debt, interest rate and your total monthly income, but you perhaps do not know the minimum amount you should pay per month to get out of the debt. You need to do some calculations to figure out which debt you should repay first or whether you should pay a certain amount on each loan every month. Instead of settling debts randomly, you may want to focus on one repayment at a time. You can also consider transferring your credit card debt to a card with a lower rate of interest. This is one of the important factors that you should consider before getting a loan.

Identify ‘good’ and ‘bad’ debt

Good debt refers to money loaned for investment purposes. These include loans for education and housing, which could actually have increased your wealth in the long term. Bad debt refers to credit card purchases, personal loans, or money taken for buying assets whose values depreciate over time. Bad debt can be easily identified with generally high-interest rates and that is the biggest reason why you should pay it off first.

Think before borrowing

Typically, you should pay off loans with the highest interest rates first. The interest rate is more important than the amount of money outstanding. You can begin with repaying debts on credit cards first. You can also pay off smaller amounts by getting small pay day loans from a money lender, which you can repay when you get your salary.

Get in touch with creditors

Always be available while you are under debt. Fighting your creditors or fleeing is a bad idea. The recovery methods are often such that debtors are led to believe that agents are inflicting personal harm on them. This is untrue, and you should always have your lenders believe you are going to repay them. Debt consolidation loans are a slightly better option as they let you consolidate all your debts and pay them off. The interest rate is lower too.

Finally, a piece of advice! It is always a good idea to borrow from a reliable money lender in the first place. However, do know how to choose a reputable money lender even though they are licensed. Borrowing from a licensed money lender means that you’ll borrow only small sums of money at a time. Small debts, no matter if the interest is high, are always easier to pay off.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/09/23/5-tips-to-get-out-of-debt/

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Things to consider when choosing a moneylender in Singapore


Moneylenders are fast turning out to be saviours for Singaporeans in a financial crisis. Your existing finances may just not be enough to settle those piling bills and emergency expenses. When choosing between banks and money lenders, banks can be a hassle when it comes to some quick money. Friends or even family might not be in a position to lend you any cash.

In such cases, money lending businesses, with their quick and easy approval, can help you get debt-free. However, you must not rush and choose just about any company. Read on to know what to consider when looking for a licensed moneylender in Singapore.

Is the interest rate reasonable enough?

Since money lenders charge slightly higher interest rates than bank loans, you should be careful and make sure that you’re not paying any extra money. Compare interest rates offered by different companies, also looking at their credibility and quality.

Be sure about whether the moneylender is licensed

This goes without saying. If you are borrowing money from an unlicensed money lender, you’re inviting trouble. Check whether your chosen lender is recognised by the IPTO (Registry of Money Lenders in Singapore). Do check whether they are experienced in the finance industry. However, beware of money lenders asking for your Sing Pass ID or password, or not returning your personal ID documents. Licensed lenders advertise only in business directories in print/online media, on their websites, and within or at their business premises.

What are the terms of repayment?

This is very important. Choose a lender that offers flexible terms of repayment. Check for it before submitting your application. Doing proper research and asking friends and previous borrowers can also reveal which companies offer the best terms of repayment. The lender should also explain the whole process in clear terms to you.

Do they have high referral rates?

If you want to borrow money from a good lender, simply look for their previous record. This can be done by finding out companies with high referral rates. The lender that you choose should also have friendly consultants to answer all your queries too.

How quickly can you get money?

Time is the most important especially when you’re trying to get a moneylender to give you money. It is usually not a huge sum and therefore you can simply forget any companies that take too long to process your details. However, you will have to be sure that a money lending agency giving you quick cash is genuine. As far as time is concerned, the process should be over inside a day and you should get your money on the same day of request.

Can you make early redemption without penalty?

Your money lender should not have any qualms about you paying off the loan before the loan term. Preferably, look for a company that allows early redemption that also waives off interest on complete early redemption.

Look for a lender that has a good online presence as well, and offers a range of loan services. You can consider getting a payday loan that you can pay off when you get your salary. Hence, research about the terms at which different moneylenders offer payday loans.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/09/22/things-to-consider-when-choosing-a-moneylender-in-singapore/

via Financial Directory Singapore

Choosing Between Banks and Licensed Money Lenders in Singapore


It is a paradox. Banks lend money to people who do not need it, while genuine borrowers often do not get an approval for bank loans. For the average customer, borrowing money from banks is a difficult task. Thankfully, there is an alternative way to arrange loans. People can borrow from licensed money lenders in Singapore. If you are in need of money, but not sure where to get it from, read on the comparison between banks and licensed money lending services.

How fast can you borrow?

If you have all the required documents, the approval time generally is half an hour. The entire process gets over in under an hour. This is because unlike banks, money lender services ask for lesser credit background. That’s where licensed money lending scores big over banks. The idea of borrowing money depends a lot upon how fast you can get your money, and if it is taking too long in a bank, you would be better off seeking the services of a money lender.

What about the loan amount?

Licensed money lending is all about small loans. For instance, if you’re buying a house, it is going to be a long process anyway. For that reason, you should contact your bank. Moneylenders offer small amounts, so if you’re fixing your bathroom, or are paying your rent, they are a better option. Generally, the loan amounts they offer are a third of your income, and they’re legally restricted to offer only as much as four times your monthly income. You can also get a payday loan that you can repay when you receive your salary.

What is the difference in interest rates?

The only drawback money lenders have vis-a-vis banks is that they disclose interest rates in person. This is necessary because detailed explanation has to be made in a meeting. You would have to visit the institution and you usually can’t compare instantly. Interest rates, therefore, are on the higher side when you borrow from a licensed money lender. The reason behind this is that money is often being offered to people with a poor credit rating.

How does credit score matter?

Banks’ concern with credit rating can be frustrating. If your credit score is plummeting and you are missing payments, managing it in a short period of time is tough. A bank will outright reject a customer with low credit rating.

However, money lenders do not focus on credit that much, since they are not giving away a huge amount of money in the first place. Background checks are conducted, and if you have outstanding payments, you could be rejected. However, if an individual can provide proofs of a fairly decent income, they can definitely get some quick cash from a licensed money lender.

The biggest upside of borrowing money from lenders is that it is far more convenient to apply. You can visit various lenders’ websites and quickly compare the services offered by them, along with the terms and conditions. To add, moneylenders are under an obligation to explain to you the terms and conditions of the loan in a language you understand.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/09/13/choosing-between-banks-and-licensed-money-lenders-in-singapore/

via Financial Directory Singapore