2017 introduces new moneylending changes disrupting the moneylending industry. This leads to the importance of finding the right licensed moneylender company that is up to date with the government new rulings.
Borrowers usually borrow out of reason, most of the time the reason is due to an emergency or money is being held up somewhere. Thus it could be hard to secure loans from financial institutions and borrowers might find licensed moneylenders instead. So let’s break it down on what is happening on the ground.
There has been ongoing errant moneylenders that tries to bypass the many rules set upon giving a loan.
The right licensed moneylender will avoid all the 4 steps above, as they would want to prevent any forms of misinterpretation and retain their moneylender license.
Never ever borrow from unlicensed moneylenders. It is paramount in finding the right licensed moneylender that one has to check the actual license of the moneylender. Verify that a moneylender is licensed by checking the list of licensed moneylenders at https://www.mlaw.gov.sg/content/rom.
The right licensed moneylenders will never grant loans or “re-loans” to borrowers to reduce or extinguish existing known debt. As some errant licensed moneylenders will abuse “re-loans” to “reset” the total borrowing costs and borrowers end up paying multiple administrative fees instead which causes borrowers to end up paying more than their principal amounts.
Should a moneylender force such a sales tactic on you, one can lodge a complain to MinLaw about the business practices being applied.
Always read the contract terms or get the loan officer to explain the details to you. When borrowing, the right licensed moneylender will breakdown the interest rates, administrative charges, late interest rates, late fees. It is part of the Moneylenders Act that loan officers must inform borrowers on the permitted fees that are chargeable. Before any loan is issued, borrowers must read through a cautionary statement or be read to by the loan officers. The right licensed moneylenders will get the statement explained to the borrowers which must be read, understood and acknowledged.
With effect from 1 October 2015, all licensed moneylenders are only permitted to impose the following charges and expenses