Warning to all borrowers in Singapore: Ensure that your lender is acting ethically and legally!
As Singapore’s number one directory and ratings site of legal moneylenders in Singapore, we receive many reports (both good and bad) about the conduct of lenders in Singapore. Before taking up a loan, borrowers should ensure that they understand their legal rights as well as the current rules and regulations that licensed moneylenders must follow.
Some unscrupulous lenders have been misinforming borrowers about the details of the regulations. One common tactic is to claim that the “new law” allows only for weekly loans and that borrowers who cannot repay a weekly loan must “re-loan” thus dramatically increasing the “administrative fees” the borrower must pay.
Other lenders attempt to increase fees by splitting one loan into several smaller loans. This would allow lenders to charge additional late fees by charging one late for each of the smaller loans. As an example, a $1,500 loan could be split into two $750 loans allowing the lender to charge two late fees instead of one in the case of a late payment.
The latest rules and regulations are designed to limit abuses by licensed moneylenders. Licensed moneylenders are required to inform borrowers of the terms and conditions of each loan. This includes a disclosure of how interest and fees will be computed and when and under what circumstances fees will be charged. Lenders are also obligated not to lend to borrowers that are unlikely to be able to repay their loan.
All licensed moneylenders are also required to provide borrowers with a “cautionary statement” detailing the abuses described above.