Borrow Wisely
It is important to only borrow what you can repay.
You should consider these before taking a loan from licensed moneylenders: | 1. | Never borrow to pay off another debt. |
|---|---|---|
| 2. | If you are unable to meet the contractual terms, the late payment and interest fees will be a financial strain not just on yourself, but also on your family. | |
| 3. | Make sure you fully understand the terms of the contract, in particular, the repayment schedule, the interest rate charged and the fees applicable. |
How much can I borrow?
For secured loans, you can obtain a loan of any amount.
For unsecured loans, you can obtain:
| Borrower’s annual income | Singapore Citizens and Singapore PR | Expat residing in Singapore |
| Below $10,000 | $3,000 | $1,500 |
| Above $10,000 and less than $20,000 | $3,000 | |
| More than $20,000 | 6 times monthly income | 6 times monthly income |
2. Moneylenders can charges how much on the interest rate?
The higher interest rate moneylenders can charge is 4% per month, is effective from 1 October 2015. This cap applies regardless of the borrower’s income and whether the loan is an unsecured loan or secured loan.
In case, 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.
3. What are the fees that moneylenders can charge?
Moneylenders are only allowing to charge three types of fees:
- Administration fees;
- Late repayment;
- Legal costs incurred for the recovery of the loan.
Other fees are not permitted, and hence the moneylender cannot enforce these.
4. How do I know whether a moneylender is licensed?
Check the list of licensed moneylenders at www.mlaw.gov.sg.
You should take note if moneylenders:
- Use abusive language, or behave in a threatening manner towards you;
- Ask for your SingPass user ID and / or password;
- Request to retain your NRIC or any other personal identification documents (e.g. driver’s licence, passport or ATM card);
- Ask you to sign on a blank or incomplete Note of Contract for the loan;
- Grant you a loan without giving you a copy of the Note of Contract for the loan and / or without properly explaining to you all the terms and conditions;
- Withhold any part of your principal loan amount for any reason; and
- Use a mobile telephone number as their business contract number.
Such practices are not acceptable. If you encounter these, you should avoid borrowing from the moneylender and report him to the Registry of Moneylenders, with information such as his business name, licence and contract numbers.
5. How can I tell whether an advertisement is from a licensed moneylender?
Licensed moneylenders are permitted to advertise only through:
- Business or consumer directories (e.g. Yellow Pages);
- The website belonging to the moneylender; and
- Advertisements placed within or on the exterior of the moneylender’s business premises.
All other channels are prohibited.
6. What should I do after being granted a loan?
- Ensure the moneylender delivers to you the full principal amount of the loan stated in the Note of Contract. Licensed moneylenders are prohibited from up-front deduction of instalment or fees.
- The Moneylender must issue a dated and signed the receipt to you every time you repay your loan or pay any fees in cash. You should check that the details (e.g. name, amount and date) are correct.
- You should receive a statement of account for all your loan(s) at least once every six months. Do check that the details (e.g. name, amount and date) are correct.
- Retain all statements of accounts and receipts of payments as proof of payment.
7. How do I lodge a complaint against a moneylender?
- You can contact the Registry at telephone number: 1800-2255-529.
- The Registry will not disclose your details to the moneylender without your consent. All complaints against moneylenders are taken seriously, and the Registry will investigate them thoroughly.
Here is the best reference to avoid loan shark Singapore Top 10 Legal Moneylenders (2019 update)