A licensed moneylender can be a great help when you looking for a quick cash loan. Some people may fear dealing with a moneylender out of ignorance. Knowing more about moneylenders can make dealing with them more straightforward without claims of unfair dealings after the deal is done.
Who is a moneylender?
This is anyone apart from a bank, building society, credit union or hire purchase company, who offers money to another individual for financial assistant.
Before taking a loan consider;
- You will be legally obliged to fulfill your contract with the moneylender
- Late payment will attract interest. Borrow only what you need to avoid overburdening yourself with debt.
- The moneylender is required by law to show you a contract in a language you understand. Read and understand the contract and ask for clarification where you do not understand.
- Look around for 2 or 3 alternatives and pick the one that offers the most attractive terms.
What interest rate will be charged?
Since 1st October, 2015, the maximum interest rate was capped at 4% per month. This is regardless of the borrower’s income, and also regardless if the loan is secured or not. Any late repayment also come with a penalty of 4% per month. The rate should be on a reducing balance. For example if you borrow $5,000 and pay only $2,000 and become late paying the $3,000, only the balance of $3,000 will be charge for the interest.
Is your moneylender trustworthy or licensed by the ministry?
You can check if your money lender is licensed by looking at the government approved list at the link https://www.mlaw.gov.sg/content/rom/en/information-for-borrowers/list-of-licensed-moneylenders-in-singapore.html
Be careful with your personal details and avoid any money lender who;
- Asks for your SingPass user ID and password
- Tells you to sign a blank note of contract
- Has a clause in the contract withholding part of the principal loan amount
- Asks to retain any personal document like your NRIC card
In addition a licensed Singapore moneylender is only permitted to advertise on the following places;
- Exterior of his premises
- His website
- Consumer and business directories
Do not trust any moneylender adverts that you see on fliers, brochures, emails and SMS. If the offer is too good to be true, it probably is. Ask to read any contract before signing it.
Do not trust any moneylender claim can transfer money into your account without going to their office.
What do you do as a loan guarantor/surety?
- Ask to read the contract
- Understand your responsibilities
- Do not let the moneylender retain any personal documents
- Do not give out your SingPass ID and password
How do you lodge a complaint?
You can contact the government registry on email at OneMinLaw@mlaw.gov.sg or call 1800-2255-529