The remaining principal determines the monthly interest rate. For instance, the entire principle debt is $12,000, and the payback was $8,000, leaving $4,000. The remaining amount, $4,000, must be charged interest monthly.
Late monthly payments determine the late interest rate. Another example, if the loan is $10,000, the current payment plan is $2,000, and the remainder is $8,000, the late interest rate will be levied on $2,000.
You will be legally responsible if you take out a loan. In order to obtain one, you need take into account the following:
Check for Other Alternatives.There are other choices than licensed moneylenders that may assist you with your financial demands. Another option is to apply for financial aid from various government agencies.
Note of Contract.You must abide by the terms and conditions set out in the Note of Contract with the licensed money lender. Settlements in court might result from failure to comply.
Ability to Repay.Make sure you have examined your financial situation and understand your capacity to repay before taking out a loan from a moneylender. Your income and your financial demands must be taken into account. Keep in mind that making late payments will result in both late interest and a late payback charge. It is advised that you borrow less money than you make and that you only utilise it for emergency requirements. Never spend money on lavish expenditures.
Full Understanding of the Contract.You, as the borrower, must fully comprehendall of the contract’s terms and conditions. Consider the following: the repayment timeline, interest rate, and fees. You must confirm, as required by law, that the lenders have adequately described the Note of Contract. They must also provide a copy of the agreement to you.
Caveats on Property.You must carefully read the Note of Contract. Make sure you are fully aware of the implications of placing a caveat on your properties. Keep in mind that if moneylenders place a caveat on your real estate, you could not get any of the selling profits until you completely repay the debt. As a result, you must carefully read the conditions before signing.
Search for Other Moneylenders.You must choose a moneylender whose terms and conditions best fit your financial demands since they differ among them. Choose the one with beneficial terms as well.
Moneylenders may only charge the following fees as of October 1, 2015:
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
Keep in mind that the total fees cannot be more than the loan’s principal amount. For instance, the overall fees, including interest rates, late interest, late repayment fees, and administrative fees, cannot exceed $10,000, for instance, if the principal loan is $10,000.
Despite a moneylender’s licence, be cautious and watch out for the following dishonest actions:
Making threats and using abusive language
Requesting your SIngPass Log-in information
Keeping your NRIC card and identification on you, such as your driver’s licence, ATM card, and so on.
Have you sign a loan agreement that is either blank or insufficient
Failed to provide you with a copy of this contract and failed to explain the terms and conditions included in the Note of Contract.
Approve a loan over the phone, over email, or by text message rather than following the law. Before disbursing a loan, the lender must personally meet the borrower in accordance with the legislation; and
Withdrew from a principal loan a sum that was not covered by the administrative charge
The Ah-long hotline at 1800-2255-529 must be contacted about the unfair practises listed above. Contact the Registry of Moneylenders and have your company name, licence number, and phone number handy.
To learn further about unlicensed moneylenders you can click here.
A licensed lender of money may only use the following media to advertise:
Business or consumer directories, either online or offline.
Registered Website Address
Within the office premises
Outside of the three (3) channels, advertising is prohibited. This is one of the criteria that separates a licensed individual from one who is not.
An unlicensed moneylender may use fliers, email, SMS, and social media sites like Facebook and WhatsApp to promote. So be careful and don’t answer them. You may file a complaint by calling 1800-2255-529 or using their contact form.
Call the Registry of Moneylenders at 1800-2255-529 to file a complaint about unfair lending practises. Your complaint will be taken seriously, and the Registry will look into it. You may also need to provide them any pertinent papers and data. You can also be requested to appear for an interview with a representative of the Registry.
According to the Consumer Protection (Fair Trading) Act, you may file a lawsuit via the Small Claims Tribunal or the Court if an inquiry reveals that a moneylender is using unfair practises.
The Registry of Moneylenders is unable to assist you in this situation since your dispute concerns a private contract or agreement between you and the moneylender.
You may get assistance from social service organisations if you’re having financial problems. They will educate you on basic credit management, help you get counselling, and even help you acquire a repayment plan.
*Credit Counselling Singapore may also involve in handling debt cases with banks.
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