Quantcast
Channel: AsiaOne
Viewing all articles
Browse latest Browse all 8682
↧

5 things to know before borrowing from licensed money lenders

April 4, 2015, 6:09 am
$
0
0

Earlier this month, a friend received an SMS that started out "OWE $ PAY $", included a lovely expletive and ended with "I SURE COME LOCK AND BURN YOUR HOUSE TONIGHT".

Thankfully, it turned to be just a scam, but it was a reminder of the harassment tactics of an unlicensed money lender. Or, to use a term that most Singaporeans should be familiar with - "Ah Long".

Banks and financial institutions have a lot of restrictions when they provide personal loans. You're a Singaporean or PR but don't earn more than $20,000 a year?

You're a foreigner with less than $45,000 annual income? You've recently defaulted on all your credit cards and are trying to borrow money from the same bank to pay it back?

If your bank has taken out a restraining order on you, and your family has started cutting your face out of their photos, who do you have left to turn to for your money woes?

Legally speaking, your only option is the licensed money lender.

17 things debt-free, financially happy people do
  • Debt-free people keep close track of personal finances. They monitor how much they earn, how much they save and how much they invest.
  • Those without debt live on less than they make. This, in turn, enables them to put money aside for buying a house, retirement or emergencies.
  • Debt-free people think twice before buying something, which allows them to make smarter decisions. Long-term thinking about spending can also prevent impulse purchases.
  • To get rid of debt, ask for help whether it is lower interest rates or forgiveness for late payment. If you know someone who has met a financial milestone you admire, don't be afraid to ask how.
  • Another common trait debt-free people have is saving money. Make it a habit to put some money into the bank account on a regular basis, just like you pay the rent every month. Adding even small amounts will give you more financial freedom later.
  • Setting a specific goal for saving money is also important as this helps you know what you are striving for.
  • You should learn how to say no to avoid sitting on a mountain of debt. Saying no to smaller expenses can add up to big savings. Host a potluck dinner instead of eating out at posh restaurant.
  • To free yourself from debt, value experiences more than snatching stuff only to catch up with the latest trend. Think about whether you would be better off working late and buying stuff by sacrificing valuable time with your family.
  • Financially-independent people plan each step carefully. They also tackle the problems along the way rationally and systematically before moving on to the next step in their game plan.
  • Financial freedom comes to those who know their limits, and choose not to overspend on things they cannot afford. They avoid debt at all costs and ensure they always have enough money for their long-term financial plan at the end of the month.
  • Not only do they ensure all their credit debts are paid for on time, financially happy people also refrain from spending on credit at all.
  • One can be rich one day and bankrupt the next. <br><br> Financial problems can occur overnight and debt-free people are aware of it. To prevent themselves from sinking into quick sand when troubles arise, they plan for unforeseen circumstances with savings, insurance and other cash reserves. <br> <br>This way, they can also have peace of mind over their financial situation as they know they are always prepared for a crisis to hit.
  • Greed can be a dangerous thing, especially if it causes you to aim for greater fortunes in spite of what you already have. <br><br> Financially-happy people count their blessings and don't complain about not having more.
  • Rational shopping is hard for many people who are not financially happy. When you have clear financial goals in mind, you will be less likely to spend on impulse.
  • Before signing up for a loan, deal or purchase, financially savvy people read up on all the alternatives and consequences of the contract first. By doing this, they ensure they get the best deal there is and mimimise their debt risk.
  • Although life might not turn out exactly the way you planned, planning for your retirement ensures you have enough for the later years.<br><br> Retirement planning needs to start as early as possible so you can work towards your goals one step at a time.
  • Financially-free people are not put down by setbacks. By being optimistic, they manage to plan rationally to find their way out of every financially-trying situation.
Banks improve transparency of credit card charges

Click on thumbnail to view. Story continues after photos. The Straits Times

  • Moves by banks to improve transparency means customers will be less likely to be hit by those dreaded "hidden" fees that tend to creep into monthly credit card statements.
  • United Overseas Bank (UOB) started the ball rolling in May, when it included a table outlining the various fees cardholders can expect.
  • ABS and its member banks agreed late last year "to extract and tabulate the key terms and conditions (of credit cards) in a standardised format, via a product highlight sheet"
  • "Before June, you had to go through two or three different agreements to see what the charges for each card were. Now you can refer to one sheet," said a bank spokesman.
  • DBS Bank took a similar tack in June, when it consolidated the fee structure information across its 12 different credit cards into a single product highlight sheet.
  • These are welcome changes, given that cardholders here typically carry around five cards and have often been caught out when disputes arise
  • Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, backed a standardised product highlight sheet but felt it could be even more simplified.
  • MAS' focus has been on reducing the occurrence of fee disputes through consumer education.
  • Mr Seah said that "Terms like 'dynamic currency conversion fee' are ambiguous and consumers are unlikely to understand."

1. Where do you find a licensed money lender?

Ever since laws were passed that prevented them from advertising their services, many now turn to the Internet to ensure that desper- I mean, interested clients have the convenience of making an enquiry via an online loan application form.

A quick Google search turns up several individual licensed money lenders as well as several directories of money lenders, just in case you don't want to settle on just one.

Currently there are 173 licensed money lenders in Singapore. Of course, you should always check the Ministry of Law website and make sure their license is still valid before you approach one.

2. How much can you loan?

As we said earlier, if your annual income is less than $20,000, it's almost impossible for you to find a bank that is willing to give you an unsecured loan, even with the best personal loan rates.

However, a licensed money lender is legally allowed to loan you up to $3,000.

If you earn more than $20,000, a licensed money lender can give you a loan of up to 2 to 4 months' salary. That doesn't mean they will, of course. Ultimately, it depends on how much they trust you to repay them back.

10 ways to stop yourself from spending money
  • Schedule a day or two each week when you spend on nothing but daily necessities, such as meals and transport, or items that you've already budgeted for.
  • Take your monthly salary and divide it by the number of hours you work in a month - including overtime - to get your hourly rate, BJ says: "Knowing you'll need to work a certain number of hours to fund a purchase may make you think twice about buying it."
  • Settling a time limit on your shopping helps you to control your spending. "If you know that you're an impulsive shopper , give yourself as little leeway as possible," BJ advices.
  • Whom you shop with influences your shopping habits, say BJ. "Shop with someone who's a rational spender-who is likely to help you to watch your money and make sure you don't part with it too readily." He adds that your shopping partner should not encourage you to buy everything you try on, unless it's within your budget.
  • "We can always find reason for 'needing' something. But before you hand over your money, stop and ask : 'if you need it badly, how have I gone for so long without it?' It's a simple question to put your spending into perspective, explains BJ.
  • Men are efficient shoppers- they take only what they need and spend less time in shops, reducing their chances of going home with an impulse buy.
  • To help you shop like a man, make a shopping list and keep to it. " Don't go browsing for something you think you might need," advices BJ
  • Those sweets and treats beside the counters? They can add up, warns BJ. Before long, you could find yourself forking out an additional $5 to $10 for these goodies.
  • "Most people pick things up at the checkout counter whole they're waiting idly for their turn to pay. Do something to occupy your waiting time- read a book , catch up with a friend over a phone , or play games on your smartphones," he advices.
  • You know the drill - you're feeling guilty about not spending enough time with your kids, so next time you're out, you 'make-out' for it by buying them clothes, toys and treats.
  • BJ says you should think of your guilt-spending in this way: "the money you spend now is the reserve for your children's future needs, which will become greater as they get older. You don't want to be in a situation where you can't afford to let them further their studies because you spent too much on them when they were younger."
  • Group-buying websites send out daily updates on current and upcoming deals, tempting you to buy things you don't need, just because of the fabulous offers, says BJ. He adds : "It's like having a sale all the time - it helps you save money but it also make you want to buy something you don't need, just to take advantage of the savings."
  • You really, really want that new tech gadget? Chances are, you can buy it for less if you hold out a little longer- and you can save towards its cost in the meantime, BJ shares his own experience: "My first television set many years ago was a 42 - inch plasma that was retailing at almost $15,000. I had only set a aside a budget of $1,000, so I waited almost two years until the price fell within that region before I finally bought it."
16 money mistakes you are making
  • We've all learned from a young age that saving is good for you. Failing to save means you have nothing to fall back on when you need it. It also means you are more likely to borrow and increase your debt when you need funds for certain things like having a wedding, furthering your education and more.
  • Your budget is the key to achieving all your goals. Just as we have limited time, most of us have limited means. So, how you choose to spend your money can either help you take that dream trip to South Africa or can keep Cape Town in your dreams. Without a budget, you also run the risk of falling into debt, a huge hindrance to achieving goals.
  • Setting aside a bit of money every month for emergencies could save you big time when you least expect it. You never know what could happen, and having funds to turn to could help you get through bad times in life.
  • If you do not plan your expenditure, you could end up spending a lot of money on things you do not need. Just because something is on sale, does not mean you should buy it. <br>Always think about how much you need the item. If you don't already have it, think carefully if you will actually use it if you did own it.
  • You could be paying a lot of unnecessary fees if you don't check your bills before paying. For example, credit card insurance that you never signed up for, or telco service subscriptions you did not know about.
  • Very few people think about retirement and when they realise it, it is too late to start saving. Plan and save for retirement from your first paycheck to ensure a comfortable retirement.
  • Choosing wrong insurance plans will affect how much you can receive when you are in need. Think carefully about the policies you are offered and read up about which insurance plans work out best for your lifestyle.
  • Credit card companies have a range of incentives which encourage people to spend more. Spending is encouraged with 'reward points', lucky draw, privilege discounts and more. Beware of these marketing gimmicks and stop yourself from spending on things you might not actually be able to afford.
  • Many people save a lot of money by doing their homework before shopping - finding out which merchant has the best price for the product they want. You can also take this further, by always trying your luck to negotiate for better prices on big item purchases. You never know when you might get a good deal.
  • It takes a certain kind of bravery for people to dabble in investments. Many experts have warned that making investment decisions based on your emotions and fear can jeopardise your ability to reap rewards. <br> "You can't let the outside environment dictate every single change you make," Mr Scott Thoma, investment strategist for Edward Jones told Fox Business.
  • Many consumers are guilty of this - signing away their lives to credit companies in exchange for products they want but do not need. While credit cards make it easy to spend, paying for debts is not as easy, especially with interest rates. Try not to reach your credit card limit every month and if you can, avoid using it at all.
  • Spending money on entertainment and leisure is good, but make sure that you can also afford to spend on classes and opportunities which are good for your career. Taking up a Chinese for business class, for example, could be very useful if you plan on expanding your business networks overseas.
  • If you need to take on a loan for your house, car, education or other purposes, be sure to do your research and obtain for a loan which is best for you. Don't fall for marketing gimmicks. Instead, think about interest rates and the realistic capability you have to repay the debts incurred. If you don't need to take out a loan, maybe you should not even apply for one at all.
  • Spending $5 a day on coffee adds up to a lot of money over a month. You could save a considerable amount if you cut down or stop spending so much on things you do not need to have every single day.
  • You can afford to have a meal without buying a drink when dining out. Bring your own water or wait till after the meal to drink some. This means healthier meals for you too!
  • Many people are used to having lunch out of the office because they are too lazy to prepare a meal beforehand. If you have time to spare, prepare a sandwich the night before so that you don't have to spend a single cent at lunch. Dining out could gradually damage your wallet in the long run.

3. How long can you loan for? And how much are the fees?

This is when things start to get tricky. Licensed money lender Credit88 got a bad reputation in December last year. The Straits Times reported that one of their clients had borrowed $400 but was expected to repay $1000 altogether, because of a "late fee" of $600.

How much time was he given on the loan? ONE DAY.

Either Credit88 thinks people loan money the way they rent bowling shoes, or they were quite cleverly abusing the fact that there are currently no laws about how much late charges they can impose on clients.

To make the story worse, that same client then went to two other licensed money lenders, Assure Capital and AP Credit for help, but ended up being slapped with the same problem - pay the entire loan by the following day, or pay a hefty late fee.

It's interesting to note that, based on the latest list of licensed money lenders, Credit88 has lost its license. Yet, who is still on the list? Both Assure Capital and AP Credit, which charged the same client a more exorbitant late fee.

4. When can I get my loan?

This is the question that gets people in trouble. A licensed money lender can give you cash fast, sometimes even within the hour once you've provided the required documentation. Which means if you need the money urgently, you're probably willing to get it at any cost, even if the cost is an arm and a leg.

(Licensed money lenders aren't allowed to chop off your arm and your leg, of course. That doesn't mean they won't get someone to threaten to.)

Ultimately, budget your salary now so that you'll never be in a position where you need money so urgently that you'll resort to exorbitant fees and extreme consequences.

5. Okay, but what happens if I really can't pay it back?

The problem with giving your employment details when you apply for the loan? It means the licensed money lenders do have the ability to claim the debt from your employers.

Whether or not they choose to do that is their prerogative, but the alternative is getting a debt collection company to do the chasing. This opens up two problems, neither of which are preferred.

If the debt collection is via legal means, then be prepared to be constantly bombarded by letters, SMSes and phone calls. It'll start with some gentle prodding, but in extreme cases, they might turn to your family members or neighbours if you don't respond.

However, if the debt collection in itself is not entirely legal, you may find yourself in a situation almost similar to having borrowed money from an "Ah Long".

Being physically harassed by debt collectors and having them "visit" your residence in order to demand it from you, almost makes you wish you had gone with an illegal money lender instead.

This article first appeared in MoneySmart


MoneySmart.sg is Singapore’s leading personal finance portal, and aims to help people maximise their money with powerful tools and engaging content.

↧
Search
Viewing all articles
Browse latest Browse all 8682

Trending Articles

Practice Sheet of Right form of verbs for HSC Students

September 22, 2019, 11:40 pm

Download: FK ft Shenky – Nakuyewa ”Prod by: Shenky”

February 16, 2017, 4:24 pm

How to win at Markstrat (Markstrat Tips and Tricks) – Vodites

January 5, 2014, 10:34 pm

Ominde Commission Report and Recommendations – Ominde Report of 1964

March 16, 2015, 5:14 am

Bureau of Internal Revenue: Regional Offices (Directory)

January 9, 2014, 11:06 pm

GO 53 on Enhancement of Ex-gratia upto 5 Lakhs Toddy Tappers in Telangana

March 26, 2017, 11:23 pm

Cakewalk CA-2A Leveling Amplifier v2.0.1.97 WiN, v2.0.1.96 OSX Incl Keygen

October 17, 2016, 7:20 am

Mp3 Download: Mdu - Kunjenjenjena

December 7, 2017, 8:16 am

How the kill the job , when DTP request running for long hours.

July 26, 2013, 2:41 am

Microsoft Intune から展開しているアプリのアップデートについて

October 17, 2016, 4:11 am

18-year-old girl was beaten for half an hour by two Northampton men in 'an...

September 1, 2017, 10:00 pm

Car crash in Dunton Bassett leaves driver in critical condition

October 7, 2014, 7:51 am

Macky 2, Two Others In Road Accident

March 29, 2015, 5:34 am

Application log 00000000000000089514: Could not convert queue DLVST90CLNT

May 14, 2015, 11:27 pm

Detroit mafia: D’Anna Brothers agree to plea deal

April 21, 2016, 6:56 am

Delivery block field greyed out using VA02

January 26, 2016, 2:52 pm

Muloraki Au

June 22, 2016, 1:44 am

【個人撮影】スマホのプライベート映像♪「中に出さないで///」カラオケ屋での生ハメ撮りが流出ｗ【リベンジポルノ】＠PornHub

October 12, 2017, 2:23 pm

BREAKING NEWS: Diamond Platnumz Is Reported Dead After Ghastly Car Accident

February 9, 2018, 4:56 am

FIAT 500 B0111 B0112

July 5, 2018, 10:31 am
Search