Even with the new rules in place since Oct 2015, errant licensed moneylenders in Singapore have been reported to worked around the rules instead. This has led to another public outcry and luckily the Singapore government is stepping in strongly on this. Let’s look into some of the best moneylender guide and tips we provide for borrowers in Singapore.

Best Moneylender industry News & Guidelines

Top 3 Bad Practises of Moneylenders

Since the new moneylending rules, some errant local licensed moneylenders issue short-term loans of less than one month, causing borrowers who can’t keep up the pace to repeatedly finance by paying administrative fees.

Bad Moneylender practises in Singapore

Another bad practise is the splitting up of a loan into multiple small amounts to borrowers who they think are unlikely to keep pace with repayment plans. This allows such moneylenders to profit from administrative fees and late fees on each loan component that borrowers do not pay on time.

The last bad practise is when loan officers provide false information telling borrowers that they are only granted a weekly loan under a “new loan” which does not exist.

“It is almost impossible to pay back a loan of say, S$1,000, within a week. They then have to re-contract and fork out another 10 per cent upfront fees. Many will take another loan from another moneylender to cover the shortfall, resulting in more loans to their name,” Pastor Lee, who runs gamblers’ recovery centre Blessed Grace Social Services. Borrowers who fail to settle a debt are charged a 10 per cent upfront administrative fee to “re-contract”, he added.

Since October 2015, the Ministry of Law(MinLaw) had received 25 complaints on such abusive practices.

Industry Minlaw & Registry of Moneylenders

So as a borrower what you should look out for and how to find best moneylender in Singapore properly?

Luckily, the moneylending regulator were alerted of such ill practices that were made. As a borrower here are some things you should see in the best moneylender in Singapore which are mentioned by the Registry of Moneylenders:

Borrowers should be informed of the fine print

All terms and conditions should be explained by a good loan officer, this includes information on how interest and various fees are computed and when the various charges are made that affects the borrower. It’s a borrower’s right to ask the loan officer to inform him of the various charges and repayment methods.

Licensed moneylenders should evaluate borrowers

Although at times it’s tough to practise this, licensed moneylenders should have all their loan officers to evaluate borrowers potential to repay. This is to prevent snowballing of debts that the borrowers cannot repay and are beyond their repayment capacity.

Best moneylender in Singapore will understand borrowers needs and their ability to repay as they would want to prevent bad debts in their business.

To warn borrowers of such loans, moneylenders are now required to provide borrowers with a cautionary statement in writing before any loan can be granted. Borrowers who have been given such loan have the right to lodge a formal complaint.

“Licensed moneylenders found to be in breach of the Directions will be investigated and dealt with accordingly,” the Registry of Moneylenders stated.

The new slew of regulations have made it even tougher for even the best moneylender in the industry. There are now fewer licensed moneylenders in the market.

Over the years, the number of licensed moneylenders here has fallen, corresponding with new regulations. The number stood at 260 in October 2011. This dropped to 218 a year later with the introduction of more stringent advertising laws.

It fell further to 185 in June 2014, after curbs on the issuance of new moneylending licences were implemented in 2012.

As of Jan 1, there were 169 licensed moneylenders.

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Categories : licensed moneylending, loans, Moneylending