Here are some tips and helpful information you should take not of before taking out any loans with any Licensed Money Lender in Singapore.

Before taking out any loans, you should be aware of some important and crucial components to keep in mind in order to avoid any complications while taking out your loan:

1. Weigh your Choices

Whether you are looking to take out unsecured loans or secured loans, it may be worth checking out other solutions to get the money that you need before considering a money lender. Financial institutions such as banks offer a wide range of financial settlements that may suit your specific situation. To learn more about their offerings, it is best that you directly contact these agencies to present your inquiries.

If you decide to consult a Licensed Moneylender in Singapore, be sure to go through and understand each and every segment of the loan contract details cautiously before affixing your signature. Review components such as moneylender fees, interest rates, repayment schedules, or any other ad-hoc hidden costs that might be imposed to you. Be sure that you are able to fulfil these terms stipulated in the contract. Otherwise, you are only getting yourself into a more burdensome situation once you start accumulating late payment fees and penalties from the Money Lender.

Explore your options before choosing a particular moneylender to take out your loan with. every Money Lender offers different rates and repayment terms, so be sure to find the most practical option that suits you. Never rush into taking out a loan until you are certain about the terms and conditions provided. Lastly, you should get a copy of the loan contract, and see to it that every detail in it is followed through during the entire duration of the loan.

2. Determine the Maximum Amount you can Loan

You can loan out any amount if you wish to take out a secured loan. However, there are specific conditions for unsecured loans such as the following:

  • For less than $20,000 annual income, you can borrow up to $3,000.
  • For $20,000 – $29,999 annual income, you can borrow up to 2 months’ worth of your income.
  • For $30,000 – 119,999, you can borrow up to 4 months’ worth of income.
  • For $120,000 (or higher) annual income, you can borrow any amount you need.

3. Clarify the interest rate charged by Moneylenders

With effect from 1 October 2015, the maximum interest rate any of the moneylenders can charge is 4% per month. This cap applies across the board within every Licensed Moneylender regardless of the borrower’s income and whether the loan is an unsecured or secured one. If a borrower fails to repay the loan on time, the maximum rate of late interest a moneylender can charge is 4% per month for each month the loan is repaid late.

4. Inquire about Ad-Hoc or Misc Moneylender’s Fees

For loans contracted between 1 June 2012 and 30 September 2015. There are 6 different types of fees that moneylenders can charge legally:

  • For the late payment of the interest or principal
  • For dishonoured or invalid cheque issued by the borrower
  • For the changes made in the loan contract terms, as requested by the borrower
  • For the early termination of the loan contract or premature redemption of the loan
  • Incurred legal costs for the loan recovery
  • For every failed GIRO deduction from a bank account made by the borrower
  • Other fees that are not permitted or enforceable by the lender

Any other fees are not permitted, and are hence not enforceable by the moneylender.

With effect from 1 October 2015, all moneylenders are only permitted to impose the following charges and expenses:

  • a fee not exceeding $60 for each month of late repayment;
  • a fee not exceeding 10% of the principal of the loan when a loan is granted; and
  • legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.

5. Affirm that the Money Lender of your Choice is Licensed

You should steer clear of unlicensed moneylenders. The best way to determine if the moneylender is licensed is by checking www.mlaw.gov.sg website for a updated list of approved and licensed Singapore moneylenders.

Moreover, you should never trust a moneylender who requires you to submit your SingPass login details or holds your personal ID documents. Other illegal practices include granting a loan without due diligence, using abusive language to potential clients and withholding a portion of the principal loan amount. You should also be given a copy of the loan’s Note of Contract, and every detail of the agreement must be discussed thoroughly with you.

In the event that you come across moneylenders with such unacceptable behaviours, be sure to report them to the Registry of Moneylenders. Provide the relevant information and details along with your official report including the business name, the contact number and license number of the moneylender. You may lodge a complaint against moneylenders by contacting the Registry of Moneylenders at at telephone number: 1800-2255-529 or at e-mail address: OneMinLaw@mlaw.gov.sg.

You have to know that you also have the right to pursue the issue through the Court or the Small Claims Tribunal under the Consumer Protection Act. Loan transactions may be set aside by the Court if these are substantially unjust or exorbitant.

To find out more about unlicensed moneylenders, you may click on this link: http://www.spf.gov.sg/ahlong/