Preparations before borrowing money from a licensed money lender

Are you in need of a few funds? Are you looking for a licensed money lender to borrow money? If yes, then you need to understand that there are a few things to keep in mind before starting the process of borrowing money. Validated money lenders work on a well-structured process of money lending. They work under the acts and principles of Minlaw. That’s why before giving a certain amount of money, they ask for a few documents.

If you are planning to borrow money from a licensed money lender then you will need to make some preparations in terms of documents to avoid any hassle. Here in this blog, we are going to a detailed discussion about all the eligibility criteria for borrowing money. Let’s head up with the first step which is getting your credit score.

Calculate your credit score and eligibility

The credit score is taken by Credit Bureau Singapore {CBS} or by the Moneylenders Credit Bureau {MLCB}. The data helps in determining your credit score which is beneficial in terms of ease for taking a loan. However, you don’t need a credit score to borrow money from a licensed money lender. But still having reliable proof can’t be denied in most circumstances. Personal loans can be easily given without checking the credit score. But there are a few borrowers who consider the credit score for issuing a larger amount of loan.

The eligibility of getting the loan depends upon your annual income to a large extent. If you have an income of less than $10000 annually then you get a loan only up to $3000. For foreigners who are living in Singapore, the amount is around $500 only. Similarly, for income between $10,000 to $20,000, the loan amount is $3,000. The foreigners living in Singapore with incomes between $10,000 to $20,000 can also get a loan up to $3,000. People with income more than $20,000 can get a loan 6 times more than their income per month.

Documents required for borrowing money from licensed money lenders

To get the loan from a licensed moneylender, you will need to prepare some required documents. These are;

• NRIC
• Tenancy agreement [for foreigners]
• Residency proof
• Income proof
• Past CPF statements
• Employment letter [for foreigners]
• Current credit score
• Employment pass [for foreigners]

Some of the licensed money lenders do not ask for credit scores. Instead, they regard borrowers’ annual income as their evidence for lending money. They can demand your payslips to determine your eligibility for the loan. Your payslips help them to understand whether you can pay back the loan or not.

Various licensed money lenders provide the loan on a fixed interest rate. There are a few regulations that every money lender registered under Minlaw needs to follow to continue their license. All these regulations are for maintaining the security and trust between borrowers and lenders. By reading the above article, now you have an idea of all the required details for borrowing the money.