Licensed moneylenders are legally obliged to fulfil their loan agreements based on stipulated terms and conditions. They also prioritize the security of their clients’ original identification documents like passport and NRIC and retrieve them through secure means, like Singpass.
They are not allowed to splash o$$$ on your door or hang slogans outside their premises. In addition, they cannot use threats or damage your property to collect your debt.
They are regulated by the Central Bank
A legal moneylender is registered with the Central Bank and must abide by government regulations. This ensures that you are protected if something goes wrong and that you will get your money back. Moneylenders are also prohibited from hiding details about their past clients, contracts, or loan agreements. In addition, they cannot charge interest that exceeds the maximum rate set by the Central Bank.
Licensed moneylenders are required to meet with borrowers face-to-face at their approved place of business and conduct a physical verification of their identity. They must also inform borrowers of their terms and conditions and allow them to cancel the loan within a certain period of time. They are also prohibited from advertising through text messages, phone calls, social media platforms, or other means not located at their approved place of business.
The new law also protects consumers from the worst behaviours of licensed moneylenders and debt collectors. It prevents them from sending hate mail or spraying things on your door or neighbours’ doors, for example. Moreover, it forbids them from harassing you on social media or cyberbullying you.
They charge a fee that does not exceed 10% of the loan principal
Moneylenders are required to follow strict rules when lending money. This helps prevent loan sharks, who harass people for repayment and can even resort to violence. Licensed moneylenders must be transparent with their charges and inform customers of their rights. In addition, they must give a written warning before they charge late interest fees or late payment fees. They must also provide a statement of accounts and receipts for all payments made, which must be checked for correctness.
Moneylenders are allowed to charge a fee that does not exceed 10% of the loan principal. However, they are not allowed to impose any other fees other than late interest and legal costs. They are also prohibited from contacting you outside of business hours, loitering around your house or workplace and affixed any posters, placards or bills on your property. They also can’t call you vulgar names or act in a rude or aggressive manner towards you.
They are not allowed to charge any extra interest or charges
There are a number of restrictions that legal moneylenders must follow. They are not allowed to charge more than 10% interest on the loan principal and must disclose this information clearly in their advertisements. They also must meet borrowers in person and conduct physical face-to-face verification of their identity. They are not allowed to advertise through text messages, phone calls or social media platforms. They must also provide information to prompt borrowers to consider if a moneylending loan is the best option and, where credit is required for immediate basic needs, inform them of potential State supports.
Be sure to consider whether you are able to fulfil the contractual terms of the loan contract, bearing in mind your income and financial obligations. If you are unable to repay the debt on time, late payment fees and interest charges may apply. This could put a strain on your family finances. In addition, debt collectors must not loiter around your house and must always give you written authorisation before they can collect your repayments.
They are not allowed to offer you a second loan
Licensed moneylenders are only allowed to charge a fee that does not exceed 10% of the loan principal. They are also prohibited from enticing you with multiple loan offers without thoroughly explaining their terms and conditions. If a loan offer seems too good to be true, it probably is.
Moneylenders are not allowed to offer you a second loan to pay off the first one, even if you’re late with payment. This is to prevent moneylenders from trapping you in a cycle of debt. They are also not allowed to change their interest rate or charges above what they are licensed to charge and what they have stated at the beginning of your loan agreement.
Some law-breaking debt collectors believe they’re playing Narcos when they form a gang to come to your door with guns and threaten that you will lose your car or home. This type of intimidation is illegal, and if a licensed moneylender does it, they will be sent to jail.
