Money lending is part of consumer credit market in Singapore. It is just used to a small extent by the people looking for consumer loans. It is a legal business which is supervised under two main governmental acts: The Moneylenders Act 2008 and the Moneylenders Rules 2009. These rules and regulations of money lending business help in providing a framework for balancing the rights and interests of the people who are seeking for lending money.
Charges and fees which the money lenders demand vary accordingly. For providing uniformity in the market, the government of Singapore has adopted stricter regulations on October 1, 2015. These regulations are set of rules which the government of Singapore has strictly applied on lenders as well as borrowers. Some of these are:
- For administrative fee, moneylenders can charge up to 10%
- They can only charge now maximum of 4% nominal interest per month
- Penalty for late interest is fixed to 4% per month
- Penalty for late fees is restricted to $60 per month
- Moneylenders can charge no additional fees from the consumers
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Money lending limitations for consumers
Money lending in Singapore particularly depends upon the annual income of the borrower. There are many firms which provide the loan money on the minimum income of $500 per month. The limit of money lent usually depends upon the salary of the borrower or some multiple of it. If you are seeking for secured loans, you can easily obtain the loan in any amount, but if you are seeking for unsecured loans, you can get loan according to some set of rules. These are:
- If your annual income is less than $20,000, you can get a loan up to $3,000.
- If your annual income is $20,000 or more but less than $30,000 you can get a loan up to your 2 month’s income.
- If your annual income is more than $30,000 but less than $120,000, you can get loan up to 4 month’s income.
- If your annual income is $120,000, then you apply to get a loan of any amount.
Penalties and charges charged by moneylenders in Singapore
Singapore government has fixed charges for various loans contracted between 1 June 2012 and 30 September 2015. There are only six types of charges on these loans:
- Every time on the late payment you will have to pay the repayment of principal or interest.
- Every time changes have been made to the contract as per your request.
- Every time your cheque got dishonoured.
- Every time your GIRO payment to the lender gets failed.
- Every time you terminate the contract of your loan.
- For each and every legal cost made during the recovery of the money by the money lender.
The government of Singapore also has some permitted some additional charges after 1st October 2015 are:
- For each late payment, you have to pay a late fee not more than $60.
- A fee of 10% of the principal at the time of loan allocation.
Moneylender does all the legal costs for the successful settlement of the loan.…