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Notes to Borrowers

Notes to Borrowers When Obtaining Loans from Licensed Moneylenders in Singapore

1) What should I consider before taking up a loan?

You should keep these key points in mind:

 

2) How much can I borrow?

For secured loans, you can obtain a loan of any amount. For unsecured loans, you can obtain:

 

3) What are the interest rates moneylenders can charge?

With effect from 1 October 2015, the maximum interest rate moneylenders can charge is 4% per month. This cap applies 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.

The computation of interest charged on the loan must be based on the amount of principal remaining after deducting from the original principal the total payments made by or on behalf of the borrower which are appropriated to principal. [To illustrate, if X takes a loan of $10,000, and X has repaid $4,000, only the remaining $6,000 can be taken into account for the computation of interest.]

 

4) What are the fees that moneylenders can charge?

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

 

5) How do I know whether a moneylender is licensed or not?

Do not borrow from unlicensed moneylenders. Verify that a moneylender is licensed by checking the list of licensed moneylenders at https://www.mlaw.gov.sg/content/rom. Notwithstanding that the moneylenders are licensed, be mindful if they:

Such practices are not acceptable. If you encounter them, you should report the moneylender to the Registry of Moneylenders, with information such as the moneylender’s business name, licence and contact numbers. Please see Question 10 for more details.

 

6) How can I tell whether an advertisement is from a licensed moneylender or an unlicensed moneylender?

Under the advertising rules, which took effect on 1 November 2011, licensed moneylenders are permitted to advertise only through these three channels: (a) business or consumer directories (in print or online media); (b) websites belonging to the moneylender; and (c) advertisements placed within or on the exterior of the moneylender’s business premises. All other channels are prohibited.

In this regard, the advertising rules can help you differentiate between licensed and unlicensed moneylenders. If you receive flyers, SMSes, emails or other forms of advertisements which are not permitted under the rules, these would be from either licensed moneylenders operating in violation of the rules, or loansharks. Hence, you are advised not to respond to such advertisements. Instead, you should report the advertisements to the Registry at 1800-2255-529 or by email at OneMinLaw@mlaw.gov.sg. Errant licensed moneylenders will be investigated by the Registry and loansharks will be investigated by the Police.

 

7) Can I rely on the content of an advertisement to take up a loan from a moneylender?

You are advised to seek clarifications on specific terms of the loan contract before signing up with a licensed moneylender, and not to rely solely on the content of advertisements from the moneylender.

 

8) In the event that I am standing as a surety for a loan, what should I look out for?

You should ensure that:

 

9) What should I do after being granted a loan?

 

10) How do I lodge a complaint against a moneylender against unfair practices and/or contract?

 

Issued by the Registry of Moneylenders on 1 June 2012

Last updated 1 October 2015

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