There is a big difference between a licensed moneylender and a loan shark. This is where you need to be aware and be cautions not to fall into some of these traps that might cause you more stress than before.
Licensed Money Lenders
The way licensed moneylenders operate are very straight forward. You will approach them to ask for a loan usually for a short-term. They will then need to:
- go through a simple screening process
- ask you for a few documents
- do a credit check
- and several other short procedures
After that, the process is over. This means that you will most likely go through something similar to how it is when you borrow from a bank, just more stripped down and straightforward.
How to tell the legitimacy of the money lender?
Basically, there are a few ways to find out if the moneylender is legitimate. In Malaysia, borrowing money from licensed moneylenders are governed under the Moneylenders Act 1951. This means that there are certain laws and regulations that ensure that you are not at a disadvantage when you borrow from these parties.
Here are some pointers:
- First, check the list of registered licensed moneylenders. This registry falls under the purview of the Ministry of Urban Wellbeing, Housing and Local Government. If the name is not there, then you MUST NOT borrow from them!
- Once you have decided who to borrow from, you can then approach them.
- In your meeting, you will be ‘interviewed’ for the reasons and such before being asked to sign an agreement. It helps to be diligent at this point and read the clauses very carefully.
Even if the moneylender is registered and fully legitimate (registered with the Ministry), WALK AWAY if you experience the following:
- The moneylender’s attitude is rude and somehow threatening
- Your questions are not answered properly at times being dismissed or evaded
- You are asked to sign something you are not comfortable with, like a blank document
What is our role?
How we fit into your plans are simple. We want to help you make the loan application as straightforward as possible and to ensure that you do not have to go through the cumbersome often tedious process as we know it is already a big decision to borrow money. We know that most borrowers appreciate confidentiality and we respect that.
So, how do you borrow money?
As mentioned, you will first need to go through the register. Make a shortlist of a few that you might be interested in based on convenience and maybe after a quick background check of the companies. Take note: Moneylenders in Malaysia are not allowed (by law) to advertise their services. Do not call numbers you see on advertisements.
Once you have chosen the moneylender of your choice, you can get down to your application procedure. If you have borrowed any type of loan from the banks before, chances are you will find this process quite familiar. First, complete the online loan enquiry form that they usually provide. Otherwise, you can fill up the form with us and then an appointment will be set up.
Your loan application should be processed and approved quite quickly, most likely at your first meeting. However, you need to furnish the important and relevant documents like your payslip, employment status, personal contact information and any other supporting documents that they will need. It helps that you call them beforehand to find out what documents are needed to avoid having to make the round again.
The legal and registered moneylender will usually have many loan options for you to choose from. This could come in small to large or short to middle term loans. It could be a personal, business, payday or other loans that you might need to get by a few weeks or months. Go through all the packages that they have but most of their interest rates are quite standard. Once you have decided which loan package to take, then enquire further before making the final decision to sign on the dotted lines.