Licensed Money Lenders VS. Loan Sharks in Sheep's Clothing

When considering the idea of a loan shark, one often thinks about a guy sitting behind a table with two thugs next to him ready to go out and collect a debt someone owes. This is not far from the truth in many instances. Licensed money lenders in Singapore take a slightly different tact. They have collection agencies that can absorb any debts that are owed to them which are not paid. A loan shark might threaten repossession or some form of violence. They might also use badgering language with their borrowers. Money lenders are regulated in that they cannot use this kind of abusive language or other disreputable methods to collect their debts.

Money lenders are a centralized institution while loan sharks work independently. Money lenders are limited in the percentage of interest they can offer and more often than not they will offer lower interest rates than loan sharks. Loan sharks might pretend to be money lenders though, so it is important for borrowers to be careful. There are pay advance lenders. The right research can determine whether there are warning signs of potential loan sharking. Online forums which monitor money lending institutions exist. Internet users are vocal when they feel they are being wronged unduly. Borrowers should never feel as if they are anything less than a person when interacting with the lenders.

Centralized money lenders are typically required to ask for proof of income. However loan sharks care less whether a person can pay something back and more if they have collateral. Collateral is a big consideration with loan sharks. They may often utilize these forms of payment in the event their borrower cannot pay back. Often, the collateral may end up being the business or purpose that the borrower needs the money for. For example, if they use the money to buy a car, the car could then become the collateral. If the borrower is borrowing for a business the business could become the collateral.

Licensed money lenders in general should be aware not to perpetuate the same criminal acts as loan sharks. Once a bad reputation is acquired it is almost impossible to shed it. Loan sharks care less about their reputation since they are performing largely illegal activities anyway, but a money lender should try to remain on the up and up. This is the only way to conduct honorable business.