Even though you might think you wouldn’t need to borrow money, the future is unpredictable. For instance, you might face an emergency, or an unforeseen event may occur. Most people choose to borrow money from moneylenders because of easy repayment, quick cash, and an overall easy process. When you borrow from an unlicensed professional or loan shark, they charge high interest and subject you to physical and mental harassment. Data shows that Singapore recorded about 1,027 unlicensed lending cases, even though it has a moneylenders act to protect borrowers, ensuring they can borrow money safely, securely, and at a reasonable interest rate. What are some of the provisions of such acts you should be familiar with, and how are they beneficial for you? Continue reading to find out.
What is the moneylender act?
Two parties are involved in a money lending transaction: lender and borrower, and a moneylenders act seeks to protect both parties by laying down specific rules and regulations. A legal document describes how the entire business should be conducted while laying down the controls on the collection process and usage of any information revealed by the borrower. In Singapore, the moneylenders’ registration and regulation process is overlooked by an official body called the Registry of Moneylenders. The current act is called the Moneylenders Amendment Act 2018 and replaced the previous Moneylenders Act 2008.
Do all moneylenders need a licence?
According to the Moneylenders’ Act in Singapore, no person will be allowed to engage in the business of lending money, or act as an agent or principal, unless they possess a proper licence. The only exceptions to this are excluded or exempt moneylenders. The law also states that they should be renewed not more than one month after their expiry, as is determined by the Registrar. A renewed licence shall also be valid for 12 months or a specific time clearly stated in it. It is necessary to be aware of this information because you should only borrow money from someone who has a valid and renewed license rather than someone with an expired one.
Do they require a place of business?
It’s mandatory for all people engaged in lending money in Singapore to have an approved place of business. According to the MLA, the lender has to apply in writing to the Registrar seeking approval for a particular business location. Of course, it is up to the discretion of the Registrar to approve or reject the application under certain circumstances. For instance, the authorities shall deny permission to set up an office if the lender doesn’t possess a valid licence or any information disclosed by them is found to be misleading or false. They may also deny permission if the lender does not submit a security deposit with the Accountant-General. You should avoid borrowing money from someone who does not have an approved place of business in Singapore, as you will be responsible for the consequences.
Is there an official list of moneylenders?
The Ministry of Law in Singapore, to make the process of money lending safe, secure, and reliable, regularly publishes a list of licensees with all the details and particulars related to them. You can also find an online list of lenders exempted from the list under Section 35 of the act. It is advisable to stick to the official list before borrowing money since it’s authentic and easily trusted.
Rules on advertising and marketing
It is necessary to have rules regarding advertising in money lending since fraudulent lenders can easily misinform customers or potential borrowers. With that in mind, the Money Lending Act in Singapore prohibits licensees from deliberately issuing or publishing any advertising material which can be misleading. Misleading information includes not mentioning the business name or not stating it clearly, withholding information like interest rate, or claiming a higher interest rate than what is said. The law shall also treat information as false if the lender mentions a specific percentage rate of interest without clearly stating the terms and conditions.
What is the maximum amount you can borrow?
The MLA has a cap on the amount of money that you can borrow from licenced lenders as unsecured loans. An unsecured loan is a loan where you don’t have to provide collateral to get the loan. In Singapore, if your income is less than 10,000 SGD$ or at least that much and less than 20,000 SGD$, you can borrow 3,000 SGD$. If your earning is at least 20,000 SGD$, you can borrow six times the monthly income. Foreigners can borrow either 500 SGD$ or 3,000 SGD$ if their earnings are less than 10,000 SGD$ or at least that much and less than 20,000 SGD$. If they have an income of at least 20,000 SGD$, they can also borrow money six times their monthly income. Lenders cannot take an interest fee and interest rate of more than 4% per month or a late fee of not more than 60 SGD$ per month. These are some things related to the moneylenders actin Singapore that you should know as a borrower. It is necessary to know the rules to borrow money safely and securely so that you aren’t subjected to unscrupulous practices.
Even though you might think you wouldn’t need to borrow money, the future is unpredictable. For instance, you might face an emergency, or an unforeseen event may occur. Most people choose to borrow money from moneylenders because of easy repayment, quick cash, and an overall easy process. When you borrow from an unlicensed professional or loan shark, they charge high interest and subject you to physical and mental harassment. Data shows that Singapore recorded about 1,027 unlicensed lending cases, even though it has a moneylenders act to protect borrowers, ensuring they can borrow money safely, securely, and at a reasonable interest rate. What are some of the provisions of such acts you should be familiar with, and how are they beneficial for you? Continue reading to find out.
What is the moneylender act?
Two parties are involved in a money lending transaction: lender and borrower, and a moneylenders act seeks to protect both parties by laying down specific rules and regulations. A legal document describes how the entire business should be conducted while laying down the controls on the collection process and usage of any information revealed by the borrower. In Singapore, the moneylenders’ registration and regulation process is overlooked by an official body called the Registry of Moneylenders. The current act is called the Moneylenders Amendment Act 2018 and replaced the previous Moneylenders Act 2008.
Do all moneylenders need a licence?
According to the Moneylenders’ Act in Singapore, no person will be allowed to engage in the business of lending money, or act as an agent or principal, unless they possess a proper licence. The only exceptions to this are excluded or exempt moneylenders. The law also states that they should be renewed not more than one month after their expiry, as is determined by the Registrar. A renewed licence shall also be valid for 12 months or a specific time clearly stated in it. It is necessary to be aware of this information because you should only borrow money from someone who has a valid and renewed license rather than someone with an expired one.
Do they require a place of business?
It’s mandatory for all people engaged in lending money in Singapore to have an approved place of business. According to the MLA, the lender has to apply in writing to the Registrar seeking approval for a particular business location. Of course, it is up to the discretion of the Registrar to approve or reject the application under certain circumstances. For instance, the authorities shall deny permission to set up an office if the lender doesn’t possess a valid licence or any information disclosed by them is found to be misleading or false. They may also deny permission if the lender does not submit a security deposit with the Accountant-General. You should avoid borrowing money from someone who does not have an approved place of business in Singapore, as you will be responsible for the consequences.
Is there an official list of moneylenders?
The Ministry of Law in Singapore, to make the process of money lending safe, secure, and reliable, regularly publishes a list of licensees with all the details and particulars related to them. You can also find an online list of lenders exempted from the list under Section 35 of the act. It is advisable to stick to the official list before borrowing money since it’s authentic and easily trusted.
Rules on advertising and marketing
It is necessary to have rules regarding advertising in money lending since fraudulent lenders can easily misinform customers or potential borrowers. With that in mind, the Money Lending Act in Singapore prohibits licensees from deliberately issuing or publishing any advertising material which can be misleading. Misleading information includes not mentioning the business name or not stating it clearly, withholding information like interest rate, or claiming a higher interest rate than what is said. The law shall also treat information as false if the lender mentions a specific percentage rate of interest without clearly stating the terms and conditions.
What is the maximum amount you can borrow?
The MLA has a cap on the amount of money that you can borrow from licenced lenders as unsecured loans. An unsecured loan is a loan where you don’t have to provide collateral to get the loan. In Singapore, if your income is less than 10,000 SGD$ or at least that much and less than 20,000 SGD$, you can borrow 3,000 SGD$. If your earning is at least 20,000 SGD$, you can borrow six times the monthly income. Foreigners can borrow either 500 SGD$ or 3,000 SGD$ if their earnings are less than 10,000 SGD$ or at least that much and less than 20,000 SGD$. If they have an income of at least 20,000 SGD$, they can also borrow money six times their monthly income. Lenders cannot take an interest fee and interest rate of more than 4% per month or a late fee of not more than 60 SGD$ per month. These are some things related to the moneylenders actin Singapore that you should know as a borrower. It is necessary to know the rules to borrow money safely and securely so that you aren’t subjected to unscrupulous practices.
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