Introduction

Individuals who are in dire need of money for various purposes and do not have bank accounts, or those who have a poor credit history, can rely on money lenders for credit facilities. One of the main reasons why individuals fear getting loans from money lenders is that they are not very credible and reliable. For more information please click legal licensed moneylender in Singapore. Therefore, individuals are more tilted towards getting a loan from the legally licensed money lenders. This article provides a general overview of the eligibility criteria for getting recognition as legal licensed money lenders.

Who are legal licensed money lenders?

As already stated, initially availing credit facilities from the money lenders is somewhat risky as they do not ensure the integrity and trustworthiness of the whole process as they don’t hold any kinds of licenses from the regulatory authorities. A money lender license is the legal document that is issued by the appropriate regulatory authorities and permits any individual, company, or business to lend money to borrowers in a specific territory. Money lending companies shall be governed by the laws and regulations of the specific jurisdiction. Licensed money lenders ensure the protection of interests of both borrowers and lenders.

Eligibility criteria for getting a legal license in money lending 

Regulatory authorities issue money-lending licenses after considering the various factors. These factors are:

• Registration: If any company is seeking a money lender license, it must be registered under the applicable company laws, be recognized as a separate legal entity, and have perpetual succession. It is to be noted that it is not necessary that only companies can have a money lender license; any partnership firm, limited liability partnership, etc. can also get a money lender license.
• History check: It is important to check the background of the company, partnership firm, or even the promoters or directors of the company to assure that there are no criminal records pending against him. Regulatory authorities also ensure that money lending companies must not have a history of financial default or repayment of loans, etc. 
• Financial sufficiency: Regulatory authorities also check whether the company has sufficient financial stability and capital to lend money to the borrowers. 

Conclusion 

Getting a loan from licensed money lenders ensures the integrity and trustworthiness of the credit structure. Regulatory authorities check the eligibility criteria of the companies who applied for money lender licenses, like financial sufficiency, registration, background checks, etc.