Do you have a loved one who has a compulsive borrowing habit? If so, you may need to know how to ban someone from money lender.
If you have poor borrowing habits, it is also possible to ban yourself from getting a loan.
In this article, we will look at how the Moneylenders Credit Bureau (MLCB) and Moneylender’s Association of Singapore (MLAS) are able to offer protection to borrowers.
You will also learn when and how to ban someone from money lender.
What Is The MLCB?
The Moneylenders Credit Bureau is a central repository of borrowers’ credit information in Singapore with licensed money lenders.
Note that the MLCB only collects information pertaining to borrowers’ records with licensed money lenders.
It does not hold any information related to bank loans and bank deposits. Nor can the MLCB make lending decisions on behalf of the money lenders.
Since the establishment of the MLCB, all Singapore licensed money lenders are required to report regularly to the MLCB regarding the repayment status of all outstanding loans. This ensures MLCB’s information is kept up to date.
Through the MLCB, a moneylender or MLCB report can be generated for each borrower. This loan information report contains the following information:
- All current loans with all regulated money lenders
- Loan type and tenure
- Entire amount of unpaid principal
- Full amount owed (including interest)
- All current loans held by the borrower
- Repayment status of each loan
Borrowers can use their credit reports to track the credit they owe, and in doing so, better manage their debts.
Using the MLCB reports, a licensed money lender can also check a borrower’s credit record before approving a new loan.
The loan information report allows licensed money lenders to evaluate their credit risk better and reject loans from individuals who borrow above their means.
This minimises the default rate of licensed money lenders, and as a result, reduces their cost of doing business.
In addition, licensed money lenders can also use the loan information reports to keep track of customers who have ongoing loan contracts with them. The MLCB report will indicate whether a borrower has taken out new loans.
In short, licensed money lenders acquire a moneylender report from the MLCB when you apply for a loan with them. But you can get a copy of the moneylender report for a modest cost.
In fact, you should review the MLCB report at least once a year. Doing so protects you from identity theft.
Once you get the report from the MLCB, you can see how licensed money lenders view your credit.
The Ministry of Law and the Registry of Moneylenders may also access borrowers’ MLCB reports in order to improve the efficiency with which borrowing and lending are conducted.
When To Ban Your Loved One From Taking A Loan
You should always borrow only what you can repay. But things get worrying when your loved one does not know how to borrow responsibly, or gets into the habit of compulsive borrowing.
If you suffer from such a compulsion, you can also ban yourself from getting a loan.
If you have done all you can, but your loved one persists in getting one loan after another, this is when you will need to know how to ban someone from money lender through the MLCB and MLAS.
Let’s look at what the MLCB can do first.
What the MLCB Self-Exclusion Listing is About and Who Can Apply
You can apply to be barred from getting unsecured personal loans (except for loans used for debt consolidation) from licensed money lenders via the Self-Exclusion Listing.
Barring yourself from taking out new loans from other parties safeguards you from accruing excessive debt. It can also make you more financially responsible.
Anyone can make applications for self-exclusion, including:
- Permanent residents (PRs)
- Foreign workers
- Foreign domestic workers
How to Register For A Self-Exclusion Listing
You can register for self-exclusion anytime using the MLCB website and your Singpass. However, if you are a foreigner who does not have Singpass, ask a friend or family member with a valid Singpass to help you.
You will need:
- Documentation to substantiate that you are authorised by the applicant
- Completed Self-Exclusion Listing application form
- Registration charge of $5
You must fill up the form completely, including the “Authorisation to apply on behalf” part.
After you have all the paperwork listed above prepared, the authorised person can proceed with the online registration on your behalf.
The authorised individual will be required to submit the aforementioned documents online to the MLCB for verification.
Effective Period Of Self-Exclusion
Once a self-exclusion application has been approved, the MLCB is unable to permit early withdrawals from the self-exclusion policy under any circumstances.
The self-exclusion will remain in effect until either it is revoked or the minimum exclusion duration expires, whichever occurs first. Singaporeans and PRs can only withdraw from self-exclusion after two years.
You are eligible to submit a new application for inclusion on the list after the mandatory period of self-exclusion has passed.
Costs Of The Self-Exclusion Listing
Those with Singpass will incur a cost of $3 for every registration for withdrawal from the self-exclusion listing. An authorised person enrolling or withdrawing on behalf of a foreigner who does not have a Singpass must pay $5. Both prices include GST.
How To Verify If You Have Been Excluded
Credit reporting agencies in Singapore will provide you with a free copy of your MLCB report yearly. To ensure the accuracy of the data, they will contact the financial institution that provided the information.
You can also request for a copy of your loan information report, which will include the current status of your self-exclusion listing and the minimum period for the exclusion, if any.
Getting your credit report from a credit agency will not lower your credit score. Since doing so enables you to better understand your borrowing options, it does not affect your credit score. In fact, it is essential to check your credit report regularly.
The report will contain your personal information including your name, NRIC, and Unique Entity Number (UEN) if you own a business, as well as the type of loan you took, the total outstanding amount, and the total amount owed to any licensed money lender in Singapore.
It will also reveal your payment status for active debts with regulated money lenders and how much time you have to repay them.
Based on this information, a licensed money lender may approve or deny your loan application.
How MLAS Offers Protection From Loans
The Moneylender’s Association of Singapore regulates how licensed money lenders handle their business.
It oversees aggregate loan restrictions, which limit the amount of money a person can borrow from all licensed money lenders combined.
Here are some of its rules:
- Registered money lenders will need the consent of the Registry of Moneylenders before employing or engaging any help in the business. A license is necessary before someone becomes a considerable shareholder in, or raises substantial shareholdings in, a licensed money lender.
- Any licensed money lender who enters a loan arrangement that exceeds regulatory interest and charge limitations is breaking the law.
- Due to new moneylending rules passed in 2019, all registered money lenders will be required to establish limited liability companies with a minimum paid-up capital of $100,000. They must also file yearly audited accounts with the Registry of Moneylenders.
- Licensed money lenders are prohibited from lending to anyone who has filed for self-exclusion at the MLCB.
Documents Required To Ban Someone From Taking A Loan
In addition, the MLAS incorporated a feature on its website called the Do Not Lend Directory. Members of the public can use this function to request that financial institutions ban individuals from taking a loan.
Anyone can make such a request via the MLAS website. However, they will be required to submit relevant verification documents. For each request, a $50 cheque made payable to the “Moneylender’s Association of Singapore”, is required, as well as the following documents:
- A cover letter detailing the individual’s credit history and why you feel he or she should be included in the Do Not Lend Directory, together with your full name and contact details
- Front and back copies of the NRIC of the person making the request
- Proof of relationship to the individual such as a child’s birth certificate and a spouse’s marriage certificate
The MLCB Report Helps Both Borrowers And Money Lenders
All parties involved in the financial sector, including licensed money lenders and borrowers can benefit from the moneylender report provided by the Moneylenders Credit Bureau.
Thanks to the MLCB report, licensed money lenders can assess the likelihood if a borrower is likely to default, which reduces their losses.
As a borrower, you have a lower risk of defaulting on your own payments because you will know better where you stand.
Both the MLCB and MLAS have functions in place that protect the welfare of borrowers. All you need to do is to know how to ban someone from money lender.
At CreditMaster, we are ready to offer speedy help if you need money urgently for yourself or a loved one.
We are one of the top licensed money lenders in Singapore, offering some of the most affordable interest rates and flexible terms.
Contact us now at +65 6748 1338 or apply for a loan today.