There are situations when we have an urgent need for money. It is possible that we don’t have enough money at that time. In such cases, if we prefer not to take help from our loved ones then the other alternative is to borrow from a financial institution.
There are many options to consider when looking into loans, from traditional banks to licensed moneylenders in Singapore. These lenders are a preferred choice for borrowers because they offer competitive interest rates and quick loan approval.
This blog post will discuss what to look for when selecting a licensed moneylender in Singapore, as well as how much money you can borrow from them.
Factors to Consider Before Taking Out A Loan From A Licensed Money Lender
Licensed moneylenders are regulated by the government to ensure that responsible loan service is provided. Before you interact with a licensed moneylender it is advisable to thoroughly investigate all the alternatives available. Before signing a loan agreement, ask the lender any questions you may have.
If you are thinking about obtaining a loan from an authorized moneylender in Singapore, there are key factors to consider:
- Evaluate the loan amount needed and your ability to repay it on time.
- Compare interest rates and charges among different moneylenders before making a choice.
- Ensure a clear understanding of the terms and conditions outlined in the loan agreement before committing to it.
The Moneylenders Act and Rules
In Singapore, moneylenders are regulated by the strict guidelines given in the Moneylenders Act and other moneylender-related regulations. Any company that wants to do business in this market is bound by these regulations; failure to do so may result in closure or heavy financial penalties when found.
The Moneylenders Act in Singapore regulates the money lending industry and sets the maximum loan amount you can borrow based on your annual income:
- The maximum loan amount for those whose yearly income is less than S$20,000 is S$3,000. Both permanent residents and citizens of Singapore are included in this.
- The maximum loan amount for those making S$20,000 or more per year is six times their monthly salary. This is applicable to foreigners living in Singapore as well as citizens and permanent residents of Singapore.
The purpose of these loan limitations is to keep borrowers from taking on more debt than they can afford to repay given their income and repayment capacity. It’s critical to take an honest look at your financial status and only take out loans that you can easily repay.
Need quick cash? Get in touch with a licensed moneylender now!
Interest Rates and Fees:
In addition to the loan size restrictions, borrowers should also consider the interest rates and fees associated with borrowing from licensed money lenders. The Ministry of Law controls interest rates imposed by licensed lenders in order to protect borrowers from excessive fees that could trap them in debt.
Licensed moneylenders in Singapore are allowed to charge a maximum interest rate of 4% per month. This gives borrowers a clarity regarding their repayment commitments by reducing the total interest charged during the loan term.
Loan Eligibility Criteria:
There are different financial support that borrowers can take from licensed moneylenders in Singapore but there are specific requirements that must be completed in order to be eligible for a loan. Usually, these requirements consist of:
- Age requirement: In order to be eligible for a loan from a licensed money lender, borrowers must be at least 21 years old.
- Income eligibility: In order to support loan repayment, borrowers must show that they have a reliable source of income.
- Employment status: Borrowers may be required by certain licensed money lenders to be employed or to have a reliable source of income.
- Creditworthiness: Licensed money lenders can assess borrowers creditworthiness to decide loan approval and terms but credit history may not be the only deciding factor.
- Your current debt: When determining your overall ability to make further loan repayments, money lenders will take into account all of your current debts.
What If You Are Unable To Repay The Loan?
In Singapore, If you are unable to repay your loan, it is advised to contact the moneylender to arrange a repayment schedule. Licensed moneylenders operate as businesses and will make efforts to support you with your loan. They must also offer a minimum of one day’s notice before canceling a loan without paying any penalties. There are possibilities for help available if you are having trouble repaying a debt.
However, even after renegotiating your loan installments, if you owe more than $15,000 and have no chance of repaying it, you might want to consider filing for bankruptcy.
Interest payments automatically stop when a debtor files for bankruptcy. Additionally, it stops lenders from taking borrowers to court. But remember that this should be your very last option.
End Note
You now know how much you are able to borrow from a licensed money lender. Make sure you take another look at the possibilities we suggested if you are unable to repay the loan.
Our loan experts at Oasis Credit Pte Ltd will advise you on the best course of action when you are looking for a loan from a licensed moneylender in Singapore.
Feel free to submit an application for a loan today!