How Can You Check A Money Lender License?

Living expenses in Singapore are high, and consequently, a shortage of finances from time to time is not uncommon. 

As such, there are times when a little extra cash might be required.

Under these circumstances, you can seek assistance from a bank or any moneylending agency. 

It’s popularly believed that money lenders are unethical, with high interest and unreasonable policies.

However, contrary to popular belief, moneylending agents or organisations with valid licenses are reliable options for quick loans.

It is worth noting that only money lenders with licenses should be your primary priority when choosing a money lender. 

In this article, expect to learn how to check a money lender license, how money lenders apply for their licenses, and the deceptive tactics used by unlicensed money lenders to trap their borrowers.

How Do Money Lenders Apply For Their Licenses?

The Ministry of Law (MinLaw) has affirmed the legal practice of moneylending, and set rules and regulations that all licensed money lenders must abide by. 

According to the Moneylenders Act, no company can run a moneylending business in Singapore unless it:

• Has an authorised license
• Is an excluded money lender
• Is an exempted money lender

The Act aims to protect the borrowers’ and lenders’ interests, and regulate the moneylending business.

The Ministry of Law offers a list of licensed money lenders with their respective details, including their license numbers. Before they can even get on this stage though, all legal money lenders in Singapore have to take a licensing exam.

The Registry of Moneylenders has temporarily stopped granting any moneylending license. However, the steps below outline what licensed money lenders had to do to get their licenses: 

Step 1: Interested applicants must register their moneylending property as a legal company on the Accounting & Corporate Regulatory Authority (ACRA) portal.

Step 2: The Registry of Moneylenders will hold the exam, which the applicant must clear.

Step 3: The interested candidate can visit the Money Lender’s Test Booking System to register. A non-refundable amount of $130 is payable for every attempt.

Step 4: After passing the exam, the applicant can apply for a license at the Ministry of Law, Registry of Moneylenders. He can click on ‘Review and Apply’ in the ‘Money Lender license’ section. 

Step 5: After clicking ‘Proceed’, the applicant has to log in using the Singpass app or Singpass ID number and password. 

Step 6: Applicant has to upload the required documents to their respective section, review the application, and submit the application.

Step 7: A non-refundable upfront amount of $400 is payable.

Documents Needed

The interested applicant must keep the following necessary documents handy when applying for the license. 

Failure to submit of them may lead to termination of the application. 

• Evidence of funds: Applicants must submit required proof that state the ways of fund accumulation. These include bank statements, past years’ worth of IR8A, income statements, etc.
• Education qualification and certificates for qualified manager: The candidate must submit documents that state his education qualification and that of the test-qualified manager.
• Images of the front and back NRICs of all person(s) and Annex: The applicant must upload the scanned NRIC copies of all the involved individuals and their completed Annex.

Updating Or Renewal Of The Money Lender’s License

A money lender’s license is valid for 12 months only. 

Every year, the agent or the organisation must renew the license if it is interested in continuing with the business. 

The interested party can follow the following steps according to the revised Moneylenders Act, 2008.

• The interested agent or organisation should apply for the renewal of the licenses one month before the expiry. The Registry will determine how the applicant(s) can pursue it.
• To push the application(s) further, licensees must notify the Registry of their intention to continue or discontinue. It, too, has to be done one month before the expiry.
• The renewal of the license depends upon the Registry. The official can levy conditions following the renewal or terminate it.
• If successfully renewed, the license will continue to be valid for another 12 months or any other specified duration. It is applicable from the day it is updated.

The appointed Registry may refuse to update the license and terminate it entirely on various legal grounds. Some of them are below:

1. When any information or statement which is essential for the renewal application doesn’t match, is incomplete or misleading.
2. Where the license no longer satisfies the requirements of the class or the purpose for renewal.
3. Where the license doesn’t place or isn’t maintained with the Accountant-General as security for the proper conduct of his moneylending business, the applicant must pay $20,000 for each place.

If a money lender follows all these steps, it should be included on the list of licensed money lenders, which you can find online. 

To know how to check a money lender license, remember that a licensed money lender must display its license prominently at its approved place of business.

What Licensed Money Lenders Cannot Do 

Licensed money lenders are answerable to the Ministry of Law for every illegal move. 

The Moneylender’s Act safeguards the borrower’s private data and allows the money lender to get legal help when the borrower fails to meet the payment deadline. 

A money lender’s license doesn’t allow them to take unfair measures, contact your friends or family, approach you at your workplace, or use scare tactics to squeeze money out of you. 

Neither can they contact you on social platforms, send you hate mails, or confiscate your NRIC.

Here is a list of what a licensed money lender can’t do:

• Harassment, Threats, or Intimidation 

The Protection From Harassment Act states that no one can threaten, verbally abuse, act violently, or publish fabricated information about any eligible citizen. 

This pretty much curtails any damaging behaviour on the lender’s part. Note that the Act also prevents your lender from bullying you on web platforms. Any misstep on its part, and you can report it.

• Unlawful Surveillance

The same Act protects you from being subjected to illegal surveillance and stalking. 

Money lenders are not allowed to follow you or your relatives, communicate with you, keep a watchful eye on you, live in your vicinity, interfere in your personal space, and send you any items. However, they are allowed to call you during business hours and send you official documents such as invoices.

• Body Harm

Money lenders and debt collectors cannot inflict any bodily harm upon you. 

Physical assault is against the law, and the punishments allotted are severe. 

Even minor injuries will not go unpunished. Severe injuries can cost the assailant several years in jail and hefty fines.

• Vandalising Properties

The Vandalism Act stops licensed money lenders from writing profanities on your property boundary or car, hanging banners outside your workplace, or affixing posters, bills, or slogans anywhere near you. If they break the law, they have to pay a fine of $1,000

• Engaging in Illegal Collection

If any money lender comes banging at your door with a group, remember this is unlawful behaviour that can result in a jail term. 

The law states that if any licensed money lender visits your property with a band of at least five people, you must report it to the police.

In contrast, authorised money lenders are known for their polite demeanour, and prioritising your safety and security. If you’re ready to take the leap, you can apply for a quick loan at Credit Thirty3.

Deception Tactics Used by Unlicensed Money Lenders

The Singapore Police has registered and investigated at least 1,700 cases from January to November 2019. 

All these cases have to do with unlicensed money lending scams, from scammers that claim to be licensed money lenders and approach civilians with their offers only to scam them.

According to police reports, victims would receive an SMS or WhatsApp message with loan offers. In one instance, the sender claimed to be the staff of a legal moneylending centre. The victim, satisfied with their verbal interaction, transferred a hefty sum to the sender to get the loan sanctioned. However, the loan never got disbursed, and there were no traces left of the contact person. 

Unlicensed or bogus perpetrators can also send you seemingly verifiable documents with government stamps from MinLaw or the Monetary Authority of Singapore. 

Thus, if you’re looking for trusted lenders, it’s essential to learn how to check a money lender license.

Another similar case involved the perpetrator demanding 7% GST from the victim. When the victim declined to pay, the loan shark continued to harass the victim and his or her family.

The Singapore Police says loan scamming is a punishable offence and that the perpetrator is liable to face long-term imprisonment. 

If found guilty for the first time, the offender will be jailed for at least five years. He or she must also pay a fine between $5,000 to $50,000, and endure three to six strokes of the cane.

Criteria For Excluded Money Lenders

An excluded money lender is a lender that lends financial aid solely to conglomerates, trustee boards or managers of business trusts, trustees of real estate investment trusts, and accredited investors.

According to the Moneylenders Act 2008, the criteria for excluded money lenders are as follows: 

• Any corporate body supported by an Act of Parliament can lend money
• Any society registered under the Co-operative Societies Act, 1979
• Any pawnbroker licensed under the Pawnbrokers Act, 2015
• Any person who lends their employee money as a benefit of employment.
• Any person engaging in a business that is not the primary source of lending money

Ensure You Know How To Check A Money Lender License

The Ministry of Law permits you to check the money lender’s license via the list of licensed money lenders. 

After learning how to check a money lender license, you are entitled to question its authenticity and verify its contact details and license number. 

As a borrower, you should know your rights and the lender’s limitations. If you face unfair treatment from a licensed money lender, the law – specifically the Registry of Moneylenders – will support you.

Seeking bank loans can take longer, while licensed money lenders offer you quick cash with a regulated interest. 

However, unlicensed money lenders have been taking the opportunity to scam unsuspecting victims of their money. As a result, the police have been spreading awareness to warn prospective borrowers. 

If you need cash urgently, there are moneylending businesses that offer you rates of interest as low as 1%. One of them is Credit Thirty3.

Get in touch with us now or apply for a loan with us using your Singpass today. It just takes five minutes.