Singapore's Moneylending Landscape
If you have a medical emergency or your business faces unforeseen emergencies, you’ll need financial assistance, fast.
If you’re like most people, you may not have enough liquidity or savings.
You can ask your friends or family for help, but that also complicates relationships. During such instances, turning to moneylending companies might be your next best option.
There are various avenues where you can seek moneylending services from. Banks, traditional financial institutions, and licensed moneylenders are some of them. However, compared to banks and other traditional financial institutions, licensed moneylenders tend to have a faster approval process and rate, and minimal documentations are required.
That said, it pays to discern between licensed and unlicensed moneylenders. Borrowing from an unlicensed moneylender is extremely dangerous. Here, you’ll find out how to choose the best moneylender, what to look out for, and what happens after your loan is approved. You’ll also learn what sets the best moneylenders apart from usual ones, and how to choose your best financial provider.
Who Are Licensed Moneylenders?
According to the Moneylender’s Act, a moneylender is a principal or agent who:
- Carries the business of moneylending
- OR presents himself or herself as involved in this business
- May or may not be involved in other businesses
This definition doesn’t include:
- Excluded moneylenders. These categories aren’t specifically prohibited to lend you money under another written law. Excluded moneylenders, such as pawnbrokers, aren’t licensed in moneylending, but they have a pawnbroker license.
- Exempt moneylenders. The government specifically exempts this category from getting a moneylending license.
Always remember to ensure that you are engaging in licensed moneylending services.
It’s always important to ensure that you are engaging in licensed moneylending services. This is because licensed moneylenders are strictly governed by the Ministry of Law. Thus, they abide by the regulations stipulated by the government. They do not overcharge and resort to unscrupulous debt collection methods.
Who Comprises The Registry of Moneylenders & Their Purpose
The Registry of Moneylenders operates under the Ministry of Law in Singapore.
This Registry establishes, controls, and enforces the regulations for Licensed Moneylenders. Therefore, the moneylending industry can develop under precise guidelines that ensure safety and correctness.
- The Moneylenders Act, which regulates moneylenders, establishes a control organism and discusses personal data.
- The Moneylenders Rules regards loan approval conditions, repayment instalments and intervals, and maximum allowed fees, among other things. These rules will prevent money laundering and financing of terrorism.
- Licence conditions for moneylenders. These conditions stipulate that all moneylending activities are to be conducted within the framework of the Penal Code (Cap. 224), Protection from Harassment Act (Cap. 256A) and Personal Data Protection Act 2012 (No. 26 of 2012).
- The Registrar’s Directions includes additions to the original regulations, such as the allowed advertising media, and the prohibition of granting loans facilitated by an illegal loan agent.
- The Professional Service Handbook includes the duties of a licensed moneylender, plus a set of good practices regarding lending, debt recovery, and advertising.
How Can I Tell If I'm Engaging In Licensed Moneylending Services?
If you are looking to take out a loan for the first time, it is natural to feel apprehensive. This in turn, might cause you to hastily make uninformed decisions. In the process, you might wind up borrowing from an unlicensed moneylender unknowingly.
All you have to do is visit the official website created by the Ministry of Law where you can view the list of licensed moneylenders.
If you’re looking for other tell tale signs, a licensed moneylender isn’t allowed to:
- Use texts or calls to get you to sign up for a loan with them.
- Approve a loan remotely, without asking you to meet at their place of business.
- Ask you to pay any installments before receiving the actual loan.
If any of that happens to you, you’re probably dealing with an unlicensed moneylender.
Moreover, licensed moneylenders are only able to use the following advertising channels to communicate their messages:
- Business or consumer directories
- Their internet websites
- Ads inside or on the building where they conduct their businesses
If you see any other form of advertising, it is most probably done by an unlicensed moneylender.
What Happens If I Unknowingly Fall Prey To Unlicensed Moneylending?
Here is what you can do if you’ve been unknowingly involved in unlicensed moneylending:
What Are The Interest Rates That Licensed Moneylenders Can Charge?
The maximum allowed interest rate is 4% per month. This is also referred to as the nominal interest.
If you make late repayments, moneylenders can charge you another maximum 4%, which is called late interest.
- Your nominal rate will be recalculated each month depending on the sum left to repay. For instance, if you get a loan of $15,000, and you’ve repaid $5,000, the 4% rate is calculated from the last $10,000.
- Your late rate is calculated from the overdue sum. For instance, if your installment is $2,000/ month, and you’re late by one month, you’ll have to pay 4% of that $2,000.
How Much Can I Borrow?
The maximum amount you can borrow depends on the type of loan:
- Secured loans: With Lending Bee, you can borrow up to $2,000,000 because you’re using an asset as collateral. If you’re unable to repay your loan, the moneylender will seize this collateral.
- Unsecured loans: Lending Bee offers unsecured loans up to $100,000. However, the amount is ultimately dependent on your annual income and residential status, as follows:
|Your Annual Salary||Maximum Amount If You’re A Singapore Citizen Or Permanent Resident||Maximum Amount If You’re A Foreigner Living In Singapore|
|$10,000 - $20,000||$3,000||$3,000|
|> $20,000||6x your monthly income||6x your monthly income|
What Do I Have To Know Before Moneylenders Grant Me With A Loan?
Before you get a loan from a licensed moneylender, you have to find out:
- If you can respect the terms of the contract. Ensure you can repay the loan and the interest rates, by taking into account your income and expenses.
- The other fees imposed, such as the administrative and late payment fees.
- The details of your installments, such as the end term until which you have to repay the debt.
Licensed moneylenders are also obliged to give you a cautionary statement. This statement includes possible forms of abusive conduct and where to report them. These behaviours include:
- Abusive language
- Requiring your SingPass ID and password
- Not returning your documents
- Asking you to sign an incomplete or blank contract
- Not explaining the terms of the contract
- Approving your loan in a text without first asking all the necessary documents
- Not giving you the whole sum
What Happens After My Loan Has Been Approved?
After your loan is approved, the moneylender has to transfer you the entire principal amount that you’ve agreed upon. The maximum percentage that a moneylender is allowed to deduct, is 10% for the loan approval fee.
Then, you’ll have to start repaying the loan according to your contract. To ensure that everything goes smoothly, you’ll need:
- A copy of the contract
- A receipt for each rate you pay
- A statement of account once every six months with the moneylender’s details, the payments you made, and the remaining amount
- All copies of the receipts and account statements you get
In the case that you are unable to repay your loan, you can opt to negotiate an extension.
It’s best to add this possibility to your loan contract to avoid paying late interest rates. If you aren’t consistent with your repayment rates, the moneylender has the right to take legal action against you. This usually happens if you’ve secured your loan with collateral.
- File for bankruptcy, if your debt is more than $15,000. This course of action ensures your moneylender cannot add more late fees or sue you.
- Ask assistance from the Insolvency Office under the Debt Repayment Scheme, if your debt is under $100,000. This course of action also ensures your moneylender can’t take legal action against you if you have an unsecured loan.
Why Choose Lending Bee As Your Preferred Moneylending Institution
Lending Bee is a licensed moneylender (Moneylender’s Licence 54/2019) and your trusted partner in offering loans to finance your personal or corporate investment needs.
Apart from being a legally licensed moneylender, Lending Bee also strives to provide the best for our borrowers. We understand that there are times when a little extra financial help is required, to finance the various milestones in life.
Here’s why Lending Bee stands out as a moneylending institution:
1. A Wide Range Of Credit Solutions
Need a personal loan for your wedding, education, home renovation or business needs?
You’ll be glad to know that Lending Bee offers a wide variety of personal loans suited to your needs!
2. Has A Large Capital Backing
With our large capital backing, you can borrow up to $100,000 for an unsecured loan, and up to $2,000,000 for a secured loan. Besides, Lending Bee will prolong your tenure to up to 3 years longer than other institutions, so you have plenty of time to repay your loan.
3. Well Versed & Experienced
Having been in the business since 2018, we have helped thousands of Singaporeans like you with their flexible rates and expertise. Getting a loan from Lending Bee will help you build your credit score and expand your business. That way, you can reach financial freedom faster and safer.
4. Has 900+ Positive Customer Reviews
If you are taking out a loan for the first time and fear that it might be a daunting process, fret not!
Having over 900 positive customer reviews, Lending Bee is an efficient, professional institution with top customer support. Most people highlight the patience and thorough explanations of the loan agents.
This means that you will fully understand your loan terms and conditions before signing off.
That way, you can work together with our loan officers to for a customizable loan and repayment plan.
This ensures for more comfortable repayment and reduces the risk of incurring unnecessary late payment fees.
5. It’s Simple To Apply For A Loan
The application process is simple, efficient and reliable.
All you have to do is fill in our 3 minute online loan application. Within the hour, our loan officer will contact you to confirm your details at one of the nearby offices. If everything checks out, you will get your money in cash or check right then and there!
Borrow With Confidence.
With Us, You Can.