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How To Determine Fake Moneylenders

A moneylender is an individual or group of individuals who provide personal loans with high interest rates. They offer such loan at high rates of interest to justify the risk involved in the process.

If you do not have a good credit history or have less access to banking activities (e.g. underbanked or unbanked), a lender is your best bet because they are willing to “lend” to people even if you are a compulsive buyer or a gambler who often get into debt.

But with so many lenders out there, how can you know which is which? Here are some ways to determine fake moneylenders.

They request to “keep” your personal documents and confidential items.

Licensed lenders will NEVER try to keep your personal documents such as your NRIC, passport, driving license, employment pass, work permit, or ultimately your ATM card.

You can easily tell that you are being tricked by a fake lender if they request for you to provide any confidential information especially your ATM card. Some lenders will try to lure you in this trap by offering lower interest rates in return of lending them your ATM (along with its password) for a week. If you encounter such situation, do not be tempted no matter how convincing their explanation is.

In such cases, those fake lenders will use your ATM for illegal purposes. Additionally, it is also a serious offense if you “assist” unlicensed lenders even if you are not aware you are doing such.

They don’t have a license.

You should know who you are dealing with. Sometimes all you need to do is to determine whether or not they have a license. Before taking any personal loan from a lender, make sure that they are licensed by checking the validity of their licenses.

The validity of a lender’s license can be checked on the Ministry of Law that provides monthly updates. Researching will save you from a lot of trouble and enables you to borrow only from licensed lenders. There are also cases where unlicensed ones are impersonating the licensed ones. So it is also suggested to verify them in their office or headquarters.

They usually text you.

If you receive an SMS text from an unknown number, beware because it is just a scam. Licensed lenders do not text potential borrowers nor encourage them through texting. A fake lender’s text usually consists of a convincing message offering you their loan services and usually ends up with “call now”, “call today”, and other encouraging actions.

Another sign is receiving an SMS that is too good to be true. Some even trick by saying you are the “selected” one to have a particular offer or anything that they could think off.

They will encourage you to sign on a blank paper.

Fake moneylenders will try demand you to sign a blank Note of Contract. A licensed moneylender will NEVER do that.

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