Know Your Facts: What are Licensed Moneylenders?
One thing’s for sure, licensed moneylenders are not loan sharks. We often make the assumption that moneylending companies other than banks are not a legitimate business. Due to the past threatening actions of loan sharks, they have instilled fear and misconception in our society. This has led to Licensed Moneylender Companies to be misunderstood as well.
However, loan sharks have also changed their demeanour in conducting loan businesses. Their more gentlemanly conduct mixed with our legal moneylenders has all the more been misleading recently. So, let’s be a well-informed community that can differentiate what’s right and wrong.
When you visit the licensed moneylender, you should ask for their business registration to confirm their business. 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 payment methods, repayment period, late payment fees and interest rates. Make sure that the moneylender is able to answer all your queries more thoroughly if you have any.
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). There is the law to determine penalties or late payments charges, unlike the loan sharks who would increase penalties according to their own terms.
Attitude or Actions Taken
Be sensitive to look out for the traits like impatient, pushy or you feeling uncomfortable when speaking to the agent. They are most likely to be a loan shark. 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 definitely loan sharks. However, loan sharks nowadays are advertising using social media platforms, even the design and copy looks professional. 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 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.
For more information, visit Icon Venture Capital’s main page or call us at +603-7733 7688 or WhatsApp to +60162172453