Guide to Borrowing from a Licensed Moneylender in Singapore?
1. What should I consider before taking a loan?
– Consider other alternatives, such as the various financial assistance schemes offered by various Government agencies.
– Consider whether you are able to abide by the contractual terms. Bear in mind your income and financial obligations. Thus only borrow what you need and are able to repay.
– Consider carefully before agreeing to any contractual term which allows a moneylender to lodge a caveat on the sales proceeds of your real estate property upon default of the loan repayment.
2. How much can I borrow?
For secured loans, you can obtain a loan of any amount. On the other hand, for unsecured loans you can obtain:
(A) Up to $3,000, if your annual income is less than $20,000.
(B) Up to 2 months’ income, if your annual income is $20,000 or more but less than $30,000.
(C) Up to 4 months’ income, if your annual income is $30,000 or more but less than $120,000
(D) Any amount if your annual income is $120,000 or more.
3. How much interest can moneylenders 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.
4. What are the fees moneylenders can charge?
With effect from 1 October 2015, all moneylenders are only permitted to impose the following charges and expenses:
(A) A fee not exceeding $60 for each month of late payment.
(B) A fee not exceeding 10% of the principal of the loan when a loan is approve.
(C) Legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.
Looking for a loan? Contact us for a legal loan! Look through the types of loans we have available and look for one suitable for you. Not sure which is suitable? Contact us and we can give you our professional advice.
If you need more information, click here to read more.
