"Taking out a loan can feel like stepping into unfamiliar territory. Questions pile up fast. How much can they charge me? What happens if I miss a payment? Can they call my workplace? Here's what most borrowers don't realize. Singapore's Moneylenders Act grants you significant legal protections. These aren't suggestions lenders can ignore. They're enforceable rules backed by the Ministry of Law. Every licensed money lender operating in Singapore follows them. No exceptions."
"Before you sign any loan agreement, your lender hands you a document called the Note of Contract. This isn't optional paperwork. It's mandatory. The note spells out your principal amount, interest rate, total repayment figure, and the exact schedule of when payments fall due. Everything needs explanation in a language you understand. If English isn't your first language, some lenders offer documentation in Mandarin, Malay, or Tamil. That's exactly why the law treats this requirement so strictly."
"Got questions about a clause? Ask. Still uncomfortable with the terms? Walk away. Regulated lenders are prohibited from pressuring you into signing something you haven't fully absorbed. That hard-sell tactic you might encounter elsewhere? It violates the Moneylenders Act. One more thing. The interest computation method needs to be crystal clear. Your lender calculates interest based on your outstanding principal balance after each payment. Not on the original loan amount. This distinction matters because it directly affects how much you'll pay over time."
Singapore law (Moneylenders Act) gives borrowers enforceable legal protections against licensed moneylenders. Protections include caps on interest and fees and rules governing lender conduct and communication during repayment. Lenders must provide a mandatory Note of Contract before signing that details principal, interest rate, total repayment, and exact payment schedule. Documents must be explained in a language the borrower understands, with some lenders offering Mandarin, Malay, or Tamil translations. Regulated lenders are prohibited from pressuring borrowers to sign. Interest must be computed on the outstanding principal after each payment rather than on the original loan amount. Borrowers have remedies if lenders breach rules.
#singapore-moneylenders-act #consumer-protections #loan-disclosure-requirements #interest-calculation
Read at London Business News | Londonlovesbusiness.com
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