Know Your Facts: What are Licensed Moneylenders?
One thing’s for sure, licensed moneylenders are not loan sharks. Many make the assumption that moneylending companies other than banks are not a legitimate. The threatening nature of loan sharks, has instilled fear and misconception in our society. This has led to Licensed Moneylender Companies being misunderstood.
However, loan sharks have also changed their demeanour in conducting business. Their more gentlemanly conduct mixed with our legal moneylenders has been all the more misleading recently. So, let’s be a well-informed community that can differentiate between right and wrong.
When you visit a licensed moneylender, you should ask for their business registration to confirm their legitimacy. Another way is to check the company’s registration number (SSM) on the Ministry of Urban Wellbeing, Housing and Local Government (KPKT) website.
In terms of loan contracts, you should be presented with a complete contract with clear terms and conditions. You should also discuss important items such as repayment methods and tenure, late payment fees and interest rates. Make sure that the moneylender is able to answer all your queries thoroughly.
Interest Rate Charged
Licensed Moneylenders must abide by the law on how much interest rates are charged. According to the Section 17A of the Moneylenders Act, they can only charge a maximum of 12% interest per year for secured loans (with collateral), and 18% interest per year for unsecured ones (without collateral). The law to determines penalties or late payments charges, unlike loan sharks who would impose high penalties on their own terms.
Attitude or Actions Taken
Be wary of impatient or pushy agents, or those that make you feeling uncomfortable. They are likely to be a loan sharks. Licensed moneylenders do not force you into accepting their loan but instead, they are willing to advise you on your financial problems. You do not need to worry about your door being splashed with red paint or your family being threatened because licensed moneylenders are here to take away financial stress, not add on to it.
Types of Advertisements
Avoid taking mobile numbers from advertisements on lamp posts and TNB boxes because they are likely loan sharks. However, loan sharks nowadays are advertising using social media platforms, with professional design and copy. A legitimate business will definitely provide you with more than just a mobile number, such as an official business address, website and office phone number.
Ultimately, do your due diligence when looking for loans and do not rush into it. At Icon Venture Capital, we are a reliable and registered moneylender. We have professional consultants that can help you with any financial crisis you are facing.