1. What factors should I consider prior to obtaining a loan?

Taking a loan means that you will have a legal liability. So, before you secure one, below are the factors that you need to consider:

  • Check for Other Alternatives. Aside from licensed moneylenders, there are also other options that can help you with your financial needs. And, among the alternative is to approach numerous Government Agencies for financial assistance.
  • Note of Contract. You are required to follow the legal agreement or terms and conditions under the Note of Contract with a licensed money lender. Failure to do so may lead to court settlements.
  • Ability to Repay. When you are borrowing from a moneylender, you have to make sure that you have analyzed your financial condition and you know your ability to repay. You have to consider your income and your financial needs. Remember that late repayments mean you will acquire a late interest and a late repayment fee. It is advisable that you borrow an amount below your income and must use it only for your immediate needs. Never use it for luxurious expenses.
  • Full Understanding of the Contract. As a borrower, you must understand very well the terms and conditions within the contract. You must take in mind the following: schedule of repayment, interest rate, and fees. As required by the law, you must make sure that the moneylenders have explained well the Note of Contract. They must also give you a copy of that contract.
  • Caveats on Property. You have to review carefully the Note of Contract. Make sure that you understand well about lodging a caveat on your properties. Take in mind that when moneylenders lodge a caveat on your real estate property, you may not get any part from the sales proceeds unless you pay off the loan in full. So, you have to go over the terms and review them very well before signing.
  • Search for Other Moneylenders. Moneylenders have varying terms and conditions and you need to find the one that best suits your financial needs. Choose also the one with favourable offers.

2. How much I can get or borrow from licensed moneylenders?

You can apply for any amount for a secured loan. And the maximum loanable amount for an unsecured loan is based on your income.

For Singaporean or PR

  • A maximum of $3000 for annual income below $10,000 and less than 20,000
  • A maximum of 6 times your monthly income with at least $20,000 annual income

For Foreigners

  • A maximum of $1500 for annual income below $10,000
  • A maximum of $3000 for with at least $10,000 and $20,000 annual income
  • A maximum of 6 times your monthly income with at least $20,000 annual income

3. How much interest rate can a licensed moneylender charge?

Effective from 1st of October 2015, a licensed moneylender in Singapore can charge a maximum monthly interest rate of 4%. A maximum also of 4% in each month of late repayment. This is applicable to all types of loans and income.

The monthly interest rate must depend and based on the principal remaining. For example, the total principal loan is $12,000 and the repayment was $8,000, so the total principal remaining is $4,000. The monthly interest rate must be charged on $4,000 as the principal remaining.

The late interest rate must be based on the late monthly repayment. For example, if the total loan is $10,000, the current installment plan is $2,000 and the remaining is $8,000, the late interest rate will be charged on the current amount to be repaid which is $2,000.

4. What are the fees that a licensed moneylender can charge?

Effective also from 1st of October 2015, moneylenders can only charge the following fees:

  • a maximum of $60 for each month of failure to repay a loan;
  • a maximum of 10% of the principal loan from the time the loan was granted or known as an administrative fee; and
  • legal cost awarded by the court for the loan recovery for each successful loan claim by a licensed moneylender

Take in mind that the total fees must not exceed the total principal loan. For example, if the principal loan is $10,000, the total charges which include interest rates, late interest, late repayment fee, and administrative fee must not be over $10,000.

5. How to verify if a moneylender is a licensed one or not?

A licensed moneylender is listed under the Ministry of Law – Registry of Moneylenders’ monthly updated list which can be seen in a PDF File.

In spite that a moneylender is licensed, be careful and take note of the following unfair practices:

  • Use of abusive language and threatening action
  • Asking your SIngPass Log-in details
  • Hold your NRIC card and personal documents e.g. driver’s license, ATM card and etc
  • Make you sign within a blank or incomplete loan contract
  • Did not explain the terms and conditions within the Note of Contract and not giving you a copy of this contract
  • Grant a loan without following the law instead approve the loan via phone, email, and SMS. As required by the law the moneylender needs to meet the borrower in person before loan disbursement; and
  • Deducted an amount from the principal loan which is not within the administrative fee

Above are unfair practices and must be reported with Ah-long hotline: 1800-2255-529. Get in touch with Registry of Moneylenders and be ready with the following: business name, license and phone number.

To learn further about unlicensed moneylenders you can click here.

6. How to tell the difference of an advertisement of a Licensed moneylender from an unlicensed one?

A licensed money lender can only advertise on the following:

  • Online or Print Business or Consumer Directories
  • Registered Website Address
  • Within the office premises

Promoting outside the three (3) channels is not allowed. This is one of the rules that can determine a licensed from an unlicensed one.

An unlicensed moneylender may advertise on flyers, email, SMS, social media like WhatsApp and Facebook. So, beware and don’t respond to them. You can report them at 1800-2255-529 or with their contact form.

7. When securing a loan, can I depend on the content of the advertisement?

It is not enough to rely on the content of the advertisement. The information given is limited. You may call or go down to the moneylender’s office and ask for further clarification.

8. What factors do I need to consider when standing as a surety for the loan?

The following are the things that you need to look into when you are standing as a surety:

  • Take in mind your responsibility
  • You must have a copy of the Note of Contract when the loan is granted
  • The licensed moneylender has explained well the Note of Contract
  • The terms of the contract are also explained
  • Your NRIC and personal IDs must not be held by a moneylender; and
  • The moneylender must not ask for sensitive information e.g. SingPass account, online banking, and email account.

9. What should I do after a licensed moneylender granted me a loan?

When you are granted a loan, make sure to observe the following:

  • You have to make sure that the licensed moneylenders deliver the right amount of total principal loan with a maximum deduction of 10% for the administrative fee.
  • Pay on time. Avoid late repayments so that you cannot incur late interest and fees.
  • Always secure a receipt each time you made a repayment and ensure the correctness of your name, amount and date.
  • Every January and July, make sure that you will receive a copy of your loans’ statement of account. Remember to check also the correctness of your information: the name, amount and date; and
  • Keep safely the copy of all your statement of account and receipt, it will serve as a proof of all your payments.

10. How to report a moneylender against unfair and illegal practices/contract?

To complain against unfair practices of moneylenders, you may contact the Registry of Moneylenders at 1800-2255-529. The Registry will take seriously your complaint and will do an investigation. You may also need to provide them with relevant documents and information. You may be also asked to attend an interview with the Registry’s officers.

If the investigation found out that a moneylender is engaging in unfair practices, you can proceed with the case via the Small Claims Tribunal or the Court under the Consumer Protection (Fair Trading) Act.

11. Can the Registry of Moneylenders help me in negotiation with a licensed moneylender when I have financial problems and cannot repay the moneylender?

Since your matter involves a private contract or an agreement between you and the moneylender, the Registry of Moneylenders cannot help you with this matter.

There are social service agencies that can help you with your financial difficulties. They will provide you knowledge about general credit management, counseling and even assist you to get a repayment plan.

  • Association of Muslim Professionals (AMP)
    Location: Pasir Ris Drive 4 #05-11 Singapore 519457
    Contact Number: 6416 3960
    E-mail Address: corporate@amp.org.sg
  • Adullam Life Counselling
    Location: 151 Chin Swee Road Manhattan House #08-04 Singapore 169876
    Contact Number: 6659 7844 / 9423 8832
    E-mail Address:admin@adullam.org.sg
  • Arise2Care Community Services
    Location: No. 5 Harper Road #02-01A Singapore 369673
    Contact Number: 6909 0628
    E-mail Address:admin@arise2care.sg
  • Blessed Grace Social Services
    Location: 18 Arumugam Road, #05-01 Antioch@Macpherson Singapore 409962
    Contact Number: 8428 6377
    E-mail Address:billy.lee@blessedgrace.org
  • Credit Counselling Singapore*
    Location: 51 Cuppage Road #07-06, Singapore 229469
    Contact Number: 6225 5227 / 6338 2663
    E-mail Address:enquiry@ccs.org.sg
  • One Hope Centre
    Location:8 New Industrial Road #04-04B LHK 3 Building Singapore 536200
    Contact Number: 6547 1011
    E-mail Address:help@onehopecentre.org
  • Silver Lining Community Services
    Location:(East) 11 Playfair Road Singapore, (West) Jurong Spring CC, 8 Jurong West St 52 Singapore 649296
    Contact Number: 6749 0400
    E-mail Address:admin@silverlining.com.sg

*Credit Counselling Singapore may also involve in handling debt cases with banks. 

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