Licensed money lenders can provide small loan amounts starting from $200 onwards to borrowers who are facing financial difficulties. They are legally allowed to lend a maximum of four times the amount of money they earn in a year. These loans are usually used to pay off credit card bills, debts, medical bills or school fees.
To ensure their business operates in accordance with the law, these licensed money lenders are obligated to follow certain rules set by the government and other regulators. One of these rules is that they are not allowed to charge more than 4% monthly interest. This makes it important to shop around and compare rates with other companies before making a decision on which company to work with.
Some prohibited practices include granting a loan over the phone or SMS before receiving the loan application form and supporting documents, withholding part of the principal loan amount for any reason and refusing to disclose the full terms of the loan to the borrower. If you encounter any of these issues, you can report the moneylender to the Registry of Moneylenders at the Ministry of Law.
A good way to tell if a money lender is licensed is to look at its business name and address on the Registry. Also, a licensed moneylender will have its license certificate displayed at their office in a visible location. Loan sharks, on the other hand, are not required to display their license and may use intimidation tactics to pressure you into taking a loan with them. licensed money lender