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.
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.
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.
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.
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.
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.
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: [email protected]
One Hope Centre
Location:8 New Industrial Road #04-04B LHK 3 Building Singapore 536200
Contact Number: 6547 1011
E-mail Address:[email protected]
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:[email protected]
*Credit Counselling Singapore may also involve in handling debt cases with banks.
Lender SG is an independent loan matching platform in Singapore. We do not provide any ‘financial products or services’ in principle. Also, we are NOT A Licensed Moneylender or A Loan Provider. We work by having our loan matching system find for the ideal loan offers that match a borrower’s financing needs. We ensure that our loan matching system is safe and free to use – no risk and no obligations. By submitting through our loan application form, your data will be processed quickly and securely by our system. Then, match it accordingly with the right offers. Please expect a CALL from the selected licensed loan provider to complete the loan process.
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