Should you consider applying for money with any licensed moneylender, you should do it with a clear mind and full details at hand. You should make a smart financial move to avoid the common financial pitfalls.
Therefore, whether for emergency purposes, business needs, or to consolidate debt, you know what to ask, which can be all that comes between an outstanding loan and an awful one.
6 Top Questions to Ask a Licensed Moneylender
The following questions should feature as the top most any time you approach money lenders, just before you make any applications, to ensure your choices are well thought out:
Is the Money Lender Licensed And Registered?
Primarily, you want to ascertain that you are dealing with a legitimate moneylender. You need to approach a money lender duly licensed and registered under the concerned authorities in Singapore.
A genuine lender would have no problem showing you all his license details. The answer to this question may save you from the trap of loan sharks or illegal lenders charging enormously high interest rates or using several dubious methods to collect debt.
What are the interest rates and the Fees?
What needs to be clearly explained is the interest rate and what additional fees are charged over the loan. Interest rate caps are usually imposed on licensed money lenders, though the rates can differ from one lender to another. Also, ask for an explanation of the interest rate, whether fixed or variable and how it will impact your repayment amount over time.
Also, find out about administrative fees, processing fees, or late payment penalties. Some may offer low interest rates but load on many heavy fees. You must be sure what you are letting yourself in for as you sign on the dotted line.
What Is the Loan Repayment Schedule?
The terms of the loan’s repayment make it or break it for most borrowers, making this another key question. Understand how long you have to repay the loan and how frequent the repayments are. Is it weekly, bi-weekly, or monthly?
The repayment schedule should align with your income cycle so that you can meet your obligations without falling behind. A few money lenders can offer flexible repayment, so do not be afraid to ask if adjustments can suit your financial situation. Also, let them know what happens in the event of a missed payment.
Does Early Repayment Attract Any Penalty?
Paying off your loan earlier may sound right, but some money lenders penalize people who do this. These are prepayment penalties to replace the interest a lender would not receive if you clear the loan on time.
Therefore, be sure to ask about early repayment policies and if any fees are involved. If you can pay the loan off earlier, you can save over the long run by choosing a lender that does not charge early payment penalties.
What If You Can’t Pay On Time?
Life is uncertain, and finances sometimes change. Please get to know how the moneylender handles overdue or missed payments. For instance, do they allow a grace period, and what are the consequences in case of default? This will give you ample time to get ready for the worst.
Importantly, ask what the fines are for late payments and if the lender has any restructuring options in case you ever have trouble making the repayments.
How Long Will the Licensed Moneylender take to Approve the Loan?
If you urgently need cash, then you will need to know how long it takes for the approval. Most accredited money lenders will approve faster than banks, but this might differ from one lender to another.
You can ask when your application will occur and when you expect the cash. Some give you the same-day approval, while others take a few days. An answer to this helps you set your expectations and plan your time, mainly in an emergency.
Conclusion
Being informed about what to ask a moneylender helps in decision-making and works for the advantage of your financial future.
Therefore, asking the above questions is crucial since it’s self-protective and enables you to make sure you enter into an agreement that is fair and realistic based on your financial circumstances.