Licensed moneylenders are part of the financial institutions that have the authority to grant loans to people, which are repaid over a stipulated period of time. On short notice, moneylenders can come in handy, and they offer several types of loans, including personal loans and payday loans.
You have to be sure that the moneylender you want to sign up with is licensed and following the rules and regulations that are in place to protect both them and we the customers.
Unlicensed moneylenders in Singapore are basically loan sharks who have no qualms about cheating you out of house and home, and may even commit identity theft, ruining you in the process.
Why Should I Borrow from Moneylenders?
Moneylenders have a more flexible loan approval process, allowing you to access your loan in the fastest time possible, at least faster than if you were getting a loan from the bank.
Most moneylenders keep the background checks to a minimum, requesting just a few documents on your part. With strict interest rate charges set by regulatory bodies, borrowing from moneylenders can make repayment easier for you than borrowing from other lending institutions.
How Much Can I Borrow?
For Singapore Citizens and Permanent Residents, if
(a) your annual income is less than $20,000, you may loan up to $3,000;
(b) your annual income is above $20,000, you may loan between 1 to 6 times of your monthly income.
For Foreigners residing in Singapore, if
(a) your annual income is less than $10,000, you may loan up to $500;
(b) your annual income is at least $10,000 and less than $20,000, you may loan up to $3,000;
(c) your annual income is above $20,000, you may loan up to 1 to 6 times of your monthly income.
What Are The Interest Rates?
As of October 2015, moneylenders charge an interest rate at the maximum of 4%, regardless of amount borrowed. This 4% interest is also charged for nothing secured and unsecured loans.
If you miss a repayment in any month, the interest on that late payment is still 4%, and it is charged to the delayed payments.
What Are The Fees?
Moneylenders are permitted to place the following fees, and only these fees, on the loans they grant:
- When you have been granted a loan, you are charged a fee of no more than 10% of the principal of that loan
- For each month’s repayment that you miss, you are charged a fee of not more than S$60
- For any successful claim filed by the moneylender for the recovery of a loan, you are to pay the legal costs that have been ordered by the court