How To Check And Verify If A Singapore Money Lender Is Licensed
If you are considering taking a loan from a money lender, you should check that the lender is licensed.
Due to the uncertain times we live in, licensed money lenders have grown in popularity. Taking out a loan from such a lender can be a helpful way to get access to quick cash when you need it.
However, it is important to borrow only from reputable lenders and compare different options before choosing one.
This article will show you how to check and verify if a Singapore money lender is licensed.
Where Can I Find A List of Licensed Money Lenders?
The Moneylenders Act and Rules regulate legal money lending in Singapore.
There are currently 154 licensed money lenders in Singapore. A complete list can be found on the Ministry of Law website. The list is updated regularly to reflect changes.
You should also read the information on the website carefully to understand your rights and responsibilities as a borrower, as well as the risks involved in taking a loan from a money lender.
Moneylending activities are regulated by the Consumer Protection (Credit Contracts) Act. This Act covers all aspects of credit contracts between a money lender and a borrower for personal, family or household purposes.
What Should I Consider Before Taking A Loan From A Licensed Money Lender?
Before taking out a loan from a licensed money lender, you should take note of these points:
- Firstly, consider how much money you need to borrow and whether you can repay the loan on time. It is essential to only borrow an amount you can afford to pay back with interest.
- It is also essential to take into account the interest rate charged. Licensed money lenders are required by law to charge a maximum interest rate of 4 % per month.
- Before choosing a licensed money lender, you should also compare the terms and conditions that different lenders offer. Take note of their repayment schedules, late payment fees, and grace periods.
- Take your time to research different money lenders and choose the one you feel comfortable with. Read the loan agreement carefully before signing anything.
- Never agree to a loan without fully reviewing its terms and conditions. Find the lender that best meets your needs by comparing offers from several lenders.
- It’s crucial to know your legal obligations while borrowing money. Any loan agreement you make with a registered money lender in Singapore must be carried out lawfully, otherwise, you risk penalties or jail time.
What Licensed Money Lenders Can Do
Take note of these regulations regarding licensed money lenders:
- Give loans to individuals in Singapore. However, they must follow the government’s specific rules and regulations, such as capping the interest rates they can charge.
- Put up advertisements on print or online directories, their websites and their office premises. Advertising on email, SMS, social media, or making unsolicited cold calls is strictly prohibited.
- If you default on your loan, the money lender has the right to take legal action to recover the amount you owe. This includes sending debt collectors to your home or place of work or suing you in court.
- Charge interest and fees on the loans they give out. However, there are limits on how much they can charge. For example, money lenders cannot charge more than 4% monthly interest and fees.
- If you have difficulty repaying the loan, debt collectors may remind you to make payment. But they must do this in a respectful and professional manner.
- If you default on your loan, the money lender is allowed to report this to the Credit Bureau. This will affect your credit score and make it harder for you to get loans from banks or other financial institutions.
- If you default on your loan, the money lender has the right to take legal action against you such as suing you in court.
What Licensed Money Lenders Cannot Do
Here are the things licensed money lenders are not allowed to do:
Licensed money lenders are not allowed to stalk their clients. Stalking is defined as repeated and unwanted attention that makes someone feel unsafe. This includes:
- Following someone
- Showing up at their home or workplace uninvited
- Making frequent phone calls
- Surveillance of you or someone associated with you
- Sending them unwanted gifts
Stalking is not only illegal, but is also a violation of these codes of conduct. If a licensed money lender in Singapore stalks you, you can report the behaviour to the Registry of Moneylenders.
Licensed money lenders in Singapore are prohibited from causing injury to their borrowers. This includes both physical and psychological injuries.
They are also not allowed to use debt collection methods that involve repeatedly harassing the borrower.
If a licensed money lender in Singapore has caused you injury, make a police report. You should also contact the Moneylenders Credit Bureau, which the lender should be a member of. The Ministry of Law will also take action if necessary.
Licensed money lenders in Singapore are not allowed to damage your property. This includes splashing paint on your door or windows, putting up signs without your permission, or changing the locks on your property.
If a licensed money lender has damaged your property, make a police report immediately. You should also contact the Moneylenders Credit Bureau. If the complaint is serious, the lender may even lose its money lending license.
Engage In Unlawful Assembly
Unlawful assembly refers to a gathering of three or more people to cause public fear or violence. If a licensed money lender has engaged in unlawful assembly, call the police.
Use Harassment, Threats And Intimidation
Licensed money lenders in Singapore are not allowed to harass, threaten or intimidate their borrowers.
This includes making phone calls or visits at unreasonable hours, making offensive remarks, showing intimidating behaviour, or sending obscene materials.
If a licensed money lender is harassing you, you can report it to the Registry of Moneylenders.
How Much Can You Borrow From A Licensed Money Lender?
There is no cap on secured loans. The table below displays the maximum amounts that may be borrowed for unsecured loans:
|Yearly income of the borrower
|Singapore Citizens and Permanent Residents
|Between $10,000 to $20,000
|A minimum of $20,000
|6x monthly earnings
|6x monthly earnings
What Are The Interest Rates And Fees A Licensed Money Lender Charges?
A licensed money lender can impose a monthly interest rate limit of 4%.
This limitation applies regardless of your wage or whether you’re looking for an unsecured or secured loan.
Licensed money lenders also have the right to levy a maximum late interest rate of 4% per month for each month that a borrower fails to make their repayments on time.
Other fees and charges also apply:
- A late payment fee of $60 each month that a payment is late.
- A fee of no more than 10% of the loan’s amount is assessed upon loan authorisation.
- The court may mandate legal fees if the money lender successfully recovers the loan.
The total fees a licensed lender may charge include late fees, advance administrative charges, arrears, and interest, which must not exceed the principal amount of the loan.
How To Check If A Money Lender Is Licensed
The Singapore government regulates licensed money lenders, which must adhere to strict rules and guidelines. Here are a few ways to check if a money lender is licensed:
- First, check the Registry of Moneylenders on the Ministry of Law website. The registry lists all licensed money lenders in Singapore and their contact information and addresses.
- Finally, you can always call the FAQ hotline at 1800-2255-529 to inquire whether a particular money lender is licensed.
Remember, it’s important to only borrow from licensed money lenders in Singapore. This will help ensure that you’re getting a fair deal and that your rights as a borrower are protected.
So how do you check and verify if a Singapore money lender is licensed?
Apart from looking at the list from the Ministry of Law, you can also visit the websites of individual money lending companies. Check their contact details with what is on the list.
If you’re unsure or something looks suspicious, contact the Registry of Moneylenders for verification.
What to Do After Your Loan Is Granted
After collecting your loan from a money lender, the following are some steps you should take to ensure you are familiar with the conditions and repayment plans.
- Once your loan is approved, the money lender will give you a copy of the Loan Agreement.
- This will list the terms and conditions of your loan, including the repayment schedule, interest rate, and fees. Read through the agreement carefully before signing it.
- Always ask the money lender for clarification if you have any questions about the agreement. Once you’ve signed the agreement, you’ll be responsible for repaying the loan according to the terms.
- If you’re having trouble making payments, contact your money lender immediately. Many licensed money lenders are willing to work with borrowers to create a new repayment plan.
- Make your loan installment payments on time to avoid late payment penalties and late interest.
- Ensure you have a receipt from the lender each time you make a loan payment, and verify its accuracy.
- Make sure that you receive a statement of account for each of your loans at least once in January and July, and ensure all the information on it is accurate.
- Keep each statement of accounts and payment receipt that is issued to you as proof of payments and paperwork.
Lodging A Complaint Against A Licensed Money Lender
Licensed money lenders in Singapore must follow certain rules and regulations set by the Ministry of Law.
If you think a licensed money lender has breached these rules, lodge a complaint with the Registry of Moneylenders.
When making a complaint about the money lender, include as much information as possible, such as the name and contact details of the money lender, and the dates and details of the incident.
You may also be asked to provide supporting documents, such as communications with the money lender or copies of loan agreements.
Once your complaint is received, it will be investigated by the Registry of Moneylenders.
If the registry finds that the money lender has violated the rules, it may take action against the money lender, such as revoking its moneylending licence or imposing a fine.
You can find more information about lodging a complaint on the registry’s website.
You can also lodge a complaint with the Small Claims Tribunal or the Court under the Consumer Protection from Unfair Trading Practices Act.
If you have any other questions about borrowing money or need advice on finding a reputable and licensed money lender in Singapore, feel free to contact BST Credit. We would be more than happy to assist you.