Who is a licensed moneylender?
A moneylender, according to the Moneylenders Act, is an entity that acts as the principal lender or an agent to a particular moneylending organization, carries or holds themselves as running a money lending business. You cannot serve as a moneylender unless you are fully licensed or exempt or excluded moneylenders in accordance with the law. Here’s a list of licensed moneylenders in Singapore.
Licensed moneylenders in Singapore can only charge a maximum interest rate of 4% per month. If the loan repayment is made late, the maximum rate of loan interest they can charge is 4% per month for each month the loan is repaid late.
Moneylenders act and regulations
In Singapore, it’s against the law to borrow from unlicensed moneylenders. The Moneylenders Act protects borrowers as it imposes a maximum interest rate and late interest rate that licensed moneylenders should never exceed.
Unlicensed moneylenders operate illegally, and they don’t care about the law, especially when trying to recover loans from borrowers. They use abusive or insulting words, threaten borrowers, and in worst cases, commit any act that might harm the borrowers or their families.
As a word of caution, if you are a work pass holder and you acquire a personal loan from an unlicensed moneylender, there is a good chance you will be barred from seeking employment in Singapore in the future. So, it’s best not to respond to advertisements and text messages from such people.
All licensed moneylenders must uphold specific responsibilities towards the borrowers, including maintaining the confidentiality of the borrower’s personal information. As a borrower, you don’t have to worry about the lender putting up banners mentioning you and shaming you for failure to repay the loan.