When you find yourself in a troubling financial situation, you might want to seek additional financial assistance. This help can be obtained by borrowing from a licensed moneylender. Whether it is for emergency situations to cover medical bills, funeral expenses, or if you are looking for house renovation loans to finance your house, applying for loans come with its terms of agreements.
Thus, it is crucial for you to know about the moneylenders act if you do not want to find yourself in a more perplexing situation. If you end up participating in an unlawful business exchange with an unlicensed moneylender, this could potentially worsen your problems rather than helping to elevate your current financial crisis.
By being well-equipped with the knowledge on the money lending activities, you can ease your way out of any potential harmful problems. Here’s what you need to know:
What is a Moneylenders Act?
Firstly, it is of paramount importance for you to know what exactly is a Moneylenders Act? This act was created to regulate and control the business of moneylending, as well as to provide the borrowers protection from any kind of problems while in the pursuit of moneylending. Under this act, it has provided guidelines for moneylenders to operate ethically.
The most crucial and important factor to take into consideration is that a moneylender service must be licensed. According to the Singapore’s Moneylenders Act, no entity can carry out the moneylending business in Singapore, whether as principal or as agent, unless if they are:
- authorized to do so by a license
- an excluded moneylender
- an exempted moneylender
Although a moneylender service should only be operating under license, there are also prohibitions that these licensed moneylenders must oblige to.
Some of the unacceptable practices that a moneylender should not do are as follows:
- Enquire on your SingPass ID or password.
- Keeping your personal ID documents such as your NRIC card or passport.
- The usage of verbal aggression or giving threats.
- Allowing you a loan despite not explaining the terms clearly or providing you with a copy of the loan contract.
- Practices usury by granting a loan without due diligence (with no proper essential supporting documents).
- Retain the supposed amount of loan for the borrower without a solid justification.
- Making you sign a contract for a loan that is blank or incomplete.
If you encounter any of these practices, you should directly report to the Registry of Moneylenders at the Ministry of Law.
While it is noteworthy to be aware of the unfair money lending practices, you should also be well informed of a good moneylender service. So the question here is, what exactly constitutes a good moneylender?
Before you opt for the service of a moneylender, you might want to ask yourself these questions:
- Has the government granted them a legit moneylender license?
- What is the duration of the moneylender service in the industry?
- Do they have positive or negative reviews from previous clients?
A credible moneylender should have the following characteristics:
- Have a valid moneylender license
- Offer fair terms and conditions
- Have a good and credible level of experience
- Provides fast and immediate response and/or approvals
- Transparent on the loan fees
- Responsive to queries
If, by chance, the moneylender service that you are involved in are harassing or threatening you for debt collection, this can be considered as unethical. Thus, what you can do if such instances happen is by lodging a report to the Registry of Moneylenders at 1800-2255-529. An online complaint can also be made through a feedback form available on the official website of the Ministry of Law Singapore.
To lodge a complaint, you have to provide information about the moneylender such as the name of the business, their license details as well as the contact number. If the matter of issue worsens, you might want to lodge a police report.
So, what now?
Once you’ve successfully identified a good moneylender and managed to secure a loan, what do you do? It is a given that you have to always return what you borrow. Unfortunately, unexpected circumstances may happen and you might be unable to do repayments on time. To overcome a situation like this, you can first try to negotiate with the moneylender to get an extension for the dateline or to issue a refinancing plan. However, it is best for you to do so prior to getting a loan in the first hand.
Keep in mind that a borrower can be legally sued by moneylenders should they consistently fail to pay back the loan. Furthermore, if the amount of the debt sum up to a minimum of $15 000, the borrower is liable to be filed for bankruptcy that will inevitably increase the debt amount.
On another note, if the accumulation of debts do not go over $100 000, you can opt for the Debt Repayment Scheme (DRS), an alternative provided by the Ministry of Law’s Insolvency Office that can help you to resolve your outstanding debts. This can help prevent legal action to be taken to the borrower of unsecured loans unless the court has granted permission to do so.
Moneylending service comes with its own perks as well as its downsides. It’s important for you to be well aware of what you are signing up for. If you are planning to take out any kinds of loans, it would be best to have a consultation first with your closed ones; family and friends if it is really the best thing for you to do. Once you are certain, you can head out to take a loan according to your needs. Be sure to make informed decisions so that you will not regret later.
If you want to find out more on the type of loans that you can apply for, head over to 365 Credit for further consultations on financial assistance.