Sometimes getting a loan becomes inevitable especially when there is a pressing financial need. Whatever your reasons are it is essential to borrow from a licensed moneylender. Therefore before borrowing you need to verify whether the lender is licensed or not by counter checking with the list of licensed moneylenders as provided by
the registry of moneylenders. In addition the moneylender needs to observe and practice high levels of professionalism and any form of malpractice should be reported to the registry of moneylenders.
So what should you consider before borrowing?
You should make several important considerations before approaching a moneylender. First ensure that you consider other options such as government aided financial assistance schemes. Such information is accessible from the respective government agencies. Second you need to consider the terms of loan contracts as provided by the licensed moneylender. This is because there are legal obligations to fulfill the terms of the contract entered between you and the moneylender. Therefore you should weigh the contractual terms against your ability to abide.
Mostly the contract language tend to be complicated. As a result it is important to ask the moneylender to explain the terms of the loan in an understandable language. Legally the moneylender is obligated to explain every term of the loan you intend to borrow. Other important aspects to consider are the repayment period other additional charges applicable fees and the interest rate. Take your time to compare different moneylenders in order to settle for the most favorable terms and rates.
It is important to note that there are six types of fees that the moneylenders are permitted to charge. These fees include late repayment of principal or interest; variation of loan contract; any bounced cheque(s) offered by you; any unsuccessful deduction from your bank account to the moneylender; early repayment of the loan or termination of the contract; and any legal costs incurred as a result of the loan recovery. Any other fees besides the six stipulated above should not apply.
In conclusion as much as you may be compelled to get a loan it is essential to obtain a loan from a licensed money lender. In order to verify whether a moneylender is licensed or not you should consult with the list provided by the registry of moneylenders. Besides the licensing you need to consider other available sources of finance before approaching a moneylender. Additionally you should examine and understand the terms and condition of moneylenders carefully before you apply for the loan. However it is vital to compare different moneylenders in order to get better terms. Nonetheless the loan amount and interest rates chargeable by moneylenders is dependent on your annual income.
