Money Lender License

Money Lender License

Money Lender License

A money lender is someone who lends small amounts of money at a higher rate of interest. The reason for charging higher rates of interest is that the money lender faces a higher risk of default than normal banks due to various reasons. People who are desperately in need of money but at the same time do not have a bank account, people with bad credit histories and those who can’t get money from friends or relatives approach a money lender for credit facilities. In India, money lenders are governed by the Money Lenders Act in different states. The Tamil Nadu Government controls the money lending process in accordance with the Money Lenders Act, 1957.  It is mandatory for every money lender to have a license. In this article, we look at the procedure for obtaining money lender license.

Factors to issue a license

Money lender license is usually granted by the Revenue Department within 3 to 4 months from the date of submission of the application form. Once the application is received, it is valid for one year. However, there are a few factors that have to be taken into consideration while issuing/renewal/endorsement of a license:

  • Whether the person has the competency to run a money lending business.
  • Whether the applicant’s premise is an apt place to run the business.
  • Whether granting the permission would be against the public interest.

Documents Required

The following documents are required to obtain the money lending license.

  • Form A application form.
  • Passport size photographs.
  • Three specimen signatures mentioning the money lenders name or his nominee.
Money Lender License

How to Apply

The following steps have to be followed to obtain a money lending license.

Step 1: Visit the Tahsildar Office

The applicant has to visit the nearest Tahasildar office

Step 2: Receive the application

The applicant has to pay a fee of Rs. 100 to receive the application form from the Tahasildar.

Step 3: Enter the details

The applicant has to enter the required details in the application form.

Step 4: Submission of the form

The form has to be submitted to the Tahasildar’s office.

Post by Bennisha

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.