Whether you are in need of money to fund a business or to defray personal expenses, one good way to get your hands on enough cash is through the services of a licensed money lender. Going directly to a money lender is beneficial because there’s less paperwork to do and you can get your hands on the money within a few days. However, there are certain things that you need to be aware of to ensure that you are dealing with a legit lender. Below is an overview of some licensed money lender selection tips that you should know. By following these practical tips, there will be less chances of you being scammed.
1) Verify if the lender is indeed licensed by relevant financial authorities. This is the first thing that you should do before you deal any further with a lender. You should ask the person directly if he has the proper documents showing that he is allowed by the law to engage in the money lending business. If he can’t provide the documents for verification, then you are better off looking for someone else. Keep in mind that licenses and documents can sometimes be faked and manipulated. With that said, it’s advisable that you research beforehand on what the licenses look like. You can also contact the concerned government agencies or institutions to verify if the lender or the company he works for are registered in their databases.
2) The loan application process should be clear and well-documented. First of all, you need to look over the application document before you start writing on it. Make sure that you understand every stipulation that it contains. If there’s something that you can’t quite understand, get the help of someone who has knowledge in financial law and regulations. If the application is too easy or too lax, then something is probably amiss. A very important thing you should remember is that you shouldn’t be paying a single penny during the application.
3) The interest rates being offered should be reasonable and should match with the prevailing market rates. The interest rates being offered by money lenders are also regulated by the appropriate government agencies. This means that a lender can’t get too low or too high when it comes to interest rates. As much as possible, go with a lender who offers rates that are very close to the market average. Just because the interest rate is very low doesn’t necessarily mean that it will be good for you. There could be hidden charges or stipulations that you haven’t looked over.
4) Read the contract thoroughly before you sign it. This is a very important rule that a lot of people take for granted. They simply glance at the contract and sign it without even reading and understanding what it contains. Not reading the contract leads to various problems in the future. What’s worse is that you will always be at a disadvantage because you signed it which basically means you agreed to every stipulation. The bottom line here is that you should read the contract thoroughly before affirming your name into it.
These licensed money lender selection tips are easy to remember and follow. They can make the difference between securing a good loan and getting conned by a scammer.