Bad financial habits can lead you into bad debts and heavy loans

Bad Financial Habits That Lead to Bad Debts and Loans

Prevention is better than cure applies not only to your health, but also your finances — eliminating bad financial habits will go a long way towards getting into bad loans and debts.

Let’s take a look at some of the simple ways we can plan ahead in order to achieve financial freedom!

1. Not planning ahead with enough insurance coverage

No matter how much you scrimp and save for the future, all it takes is one unexpected event such as falling sick or getting into a major accident to completely wipe out your savings.

And one of the best ways to prevent that from happening is to make sure that you and your family members are insured.

Singaporeans have a pretty bad impression of the insurance industry mainly due to horror stories of people who paid for insurance companies’ investment policies and not having much to show for it at the end of its investment period.

However, you can completely ignore those insurance products and go straight for the important ones — term life and hospitalisation insurance.

BONUS: If you have served national service, you are actually eligible for MINDEF Group Insurance from Aviva. MINDEF subsidised a portion of the premiums, making these plans a lot more affordable. You can even buy them for your spouse and children!

2. Not sticking to a budget

One of the most common reasons why people get into debt is that they did not budget and often spend more than they thought they did.

Here’s a method you can try if you aren’t sure where to start with budgeting.

The 50-30-20 ratio

50% in spending — this includes your things like your travelling cost, food and bills

30% in investments or wants — you can use this fund for investing in your retirement or to buy things that you want

20% in savings — this will be your emergency or rainy day fund. A good gauge will be to save at least 6 months worth of living expenses in case you can’t work for any reason.

Besides budgeting, you can also start tracking your expenses to find out where all your money went in order to have a better grasp of your finances.

3. Not repaying credit card bill in full

As Singaporeans, we love our rewards, cashback and miles points, and some of us sign up for a myriad of cards in order to take full advantage of all the different promotions.

That can be a really dangerous situation, especially if you do not track your spending well, and wind up owing a lot more credit than you can pay off.

One of the worst things you can do with credit card bills is to only pay the minimum sum every month, and letting your debt roll with interest every month.

For example, if you only pay the minimum sum on a $5,000 credit card bill with a 25% annum interest rate, you will take almost 14.5 years to pay off everything and end up paying almost 3 times more than what you originally owe!

So, if you rely on credit card often, make sure you pay the full sum whenever possible.

4. Not checking your bills regularly

Singaporeans led a busy life and sometimes that means letting those bills sit on the table longer than it should.

This can lead to late payment charges or interest charges if you let your bills accumulate from month to month.

There is really no excuse to make this mistake and pay more than you should. Set a reminder or an alarm to take care of your bills on time!

5. Not spending within your means

This applies no matter how much you earn.

For example, if you compare someone who earns $100,000 but spends $120,000, and another who earns $50,000 and spends $25,000, who is in a better financial position?

Of course, it will be the guy who only spends 50% of what he earns. By spending only half of what he earns, he can invest or save the rest in preparation for emergencies and retirement.

Start making the right financial decisions today, and your future self will definitely thank you. 

How to get Personal loans in Singapore from licensed money lenders and avoid loan scams

Personal Loans in Singapore from Licensed Money Lenders and Tips to avoid Money loan scams

Regardless of your life situation now, one seldom cannot run away from the usage of money. In today’s fast-growing economy with increasing global changes to market needs and demands, you probably worry about your financial situation at some point. Aside from that, you probably would have gotten a form of personal loan from a company (e.g home loan, car loan, renovation loan, bank loan). 

Or you would need to pay a large upfront amount like hospitalisation for the birth of your newborn, purchase of a new BTO flat, your wedding plans or the down-payment of a car. All these are personal loans or big expenses to meet your needs but not the unexpected needs that may arise. These cash flow issues can come at any moment, say an emergency hospitalisation stay (god bless that this does not happen), a sudden shortage in financial income like a job loss (retrenchment).

This is when you would need to ready your emergency or rainy day funds, which is recommended to be 6 months of your monthly salary. Hence regardless of your life stage, having access to finance is crucial.

Should you run into such cash flow issues, you might turn to your family members or relatives, your friends or colleagues for financial help. Some may be afraid to do so or are shunned away or no one in their network can provide any help. Some turn to banks or loan sharks for fast personal loans should they want immediate cash access. Those who turn to loan sharks might do so because of their financial standings not meeting the bank needs or they have no other means. Some turn to licensed money lenders instead, which are quite often a misunderstood lot given the bad rep it is given from the media. 

Seriously?! Wut? Getting a personal loan from licensed money lenders? YES! 

Aren’t they loan sharks? No!

Personal Loans from Licensed Money Lenders

Yep! Licensed Money Lenders are completely legit, registered firms and in fact undergo a stringent checklist under the Ministry of Law (MinLaw). It is often misunderstood term due to the phrase “Money Lenders” linking them to loan sharks or the typical ah long 大耳窿

In fact, licensed money lenders adhere strictly to the rules and terms set upon them and licenses are given only to firms that pass these standards. New licenses are seldom issued and standards are getting tighter every year as new rules bound them. Min Law depicts the terms, one such term is the 4% maximum interest rate per month. This was created in the plight of the public concerns on the misapplication of interest rates by licensed money lenders and to prevent borrowers from over-borrowing and lenders from over lending. 

Aren’t they loan sharks? No!

Where can I find Legit Licensed Money Lenders?

So how does one know whether a firm is operating a licensed money lending business? Simply check the full list of licensed moneylenders on MinLaw website. As of September 2019, there are 158 licensed money lenders in Singapore. This list is updated frequently, so the first thing to do before heading down to a moneylender for a personal loan is to check it’s license against the MinLaw site.

The Must-Have Checklist to identify Licensed Money Lender

  1. All licensed money lenders have a unique license number which you can verify against the MinLaw website. 
  2. Licensed money lenders will not use abusive language, or behave in a threatening manner to you. We are a pretty happy bunch. 
  3. Will never ask for your SingPass user id or password. There have been cases in the past whereby illegal money lenders asked for it and used it for other means.
  4. Will never retain your NRIC card or personal document (driver’s license, passport, work permit, employment pass) 
  5. Licensed money lenders must issue you a proper Note of Contract for the loan. They are to explain to you the legal terms behind it. A borrower has to 
  6. Licensed money lenders are not allowed to solicit loans, or SMS or WhatsApp potential borrowers about loans. They are only allowed to advertise on their own property, website or in directories. Should you receive such messages, it is from an unlicensed moneylender. 
  7. Licensed money lenders do not transfer loan amounts immediately. Do not be enticed by scammish and misleading sales tactics such as “Immediate Cash”, “Instant Cash”.
  8. Licensed money lenders are only allowed to charge a monthly interest rate of not more than 4%.
  9. Licensed money lenders in Singapore can only charge a fee of not more than 10% of the principal granted loan amount. For late fees, the maximum amount they can charge is capped at $60.

Money lender licenses are difficult to obtain and maintain at the same time, hence these moneylending firms would not want to risk losing their licenses due to quick gains. 

Illegal Moneylenders Acts in Singapore

Illegal Moneylenders Acts in Singapore

“Hi bro, looking for a reliable and trustworthy lender for money loans?” – by illegal moneylenders.

Have you been getting this type of messages from random numbers in the past few months? If so, you have been targeted by illegal moneylenders syndicates.

Illegal moneylenders have been acquiring databases of mobile numbers and hounding potential customers with SMS or WhatsApp messages, sometimes up to a few times a day, to promote their money lending deals.

Money Lending Scams

To make things worse, some of these moneylender messages can be scams.

The scammers will act like a typical illegal moneylender and ask for your personal details in order to secure the loan but are not willing to release the money until they have received a cash deposit from you.

However, once the deposit has been sent over, these scammers go uncontactable and might even use the details collected from you to harass you further.

Not Just Messages, But Calls Too

Moneylenders has gotten more brazen recently and started calling their “leads” to solicit for business.

Blocking or marking the numbers as spam doesn’t stop any of these acts from happening either because just one week later, you will see a new number messaging or calling you.

What To Do If You Start Receiving These SMS or Calls

First, you have to know that licensed moneylenders can only advertise their business on their website and on their premises. Any other form of money lending advertising is prohibited by law, so make sure to avoid making contact when you receive money lending sms or calls.

The Singapore Police Force has also outlined the following steps to deal with these SMS and calls:

a) Do not reply or interact with the loanshark;

b) Notify the Police via i-Witness at https://www.police.gov.sg/iwitness;

c) Report the number as “spam” and block the number using readily available spam filter applications.

Avoid Illegal Moneylenders At All Cost

Illegal moneylenders might offer you fast money or flexible repayment options such as weekly, bi-weekly, monthly or even on pay days, but the interest rates they charge generally hover around 10 per cent to 20 percent — which is a lot more than what licensed money lenders can charge.

If you find yourself in need of money, always try to look for government organisations to help you before looking at financial institutions such as licensed moneylenders, banks or pawn shops.

Illegal Money Lending Activities in Singapore: Learn about remittance firms creating illegal loans

Illegal Money Lending Activities signs: Remittance firms offer loans

Illegal money lending activities seems to have another new scheme involved. This came in the form of remittance firms providing cash advances with interest to maids. 

Illegal Money Lending activities

Illegal money lending activities was seen in a remittance licensee, Toast Me, which was providing a special form of cash advance with interest to maids. In one contract, the firm charged a maid 10 per cent interest for a loan amount of $700. Only $630, was issued to her after a “first-time fee of $70” was deducted. However, this format of money lending can be considered illegal as it is exploiting a loophole in the regulation systems.  As the primary goal of remittance firms is to receive money and transmit it, as compared to lending money, which is the role of licensed moneylenders

A new prohibition against illegal money lending activities for remittance firms will be in place by Sept 10 to stop loan activities. The new prohibition will not affect existing loans, including restructured and refinancing loans. 

The rise in an increasing number of foreigners borrowing from licensed moneylenders, from 7,500 for the entirety of 2016 to 35,000 in just the first half of 2018.

It was mentioned by industry observers that it was unusual for remittance firms to be offering loans as the priority is to receive money for the purpose of transmitting it overseas but noted that some remittance firms might be exploiting the loophole since they are not licensed moneylenders under the oversight of the Ministry of Law. 

Loan caps and tighter regulations have been aimed at protecting foreigners who are living and working here in Singapore. However, this has led to some borrowers to turn to unlicensed moneylenders for sources of loans. 

The new prohibition notice was issued before the new Payment Services Act comes into force. In the upcoming Act, companies that are offering payment services such as remittance will not be allowed to grant loans to individuals. 

The current Payment Systems (Oversight) Act and the Money-changing and Remittance Business Act will both be revoked Payment Systems (Oversight) Act and the Money-changing and Remittance Businesses Act will both be repealed when the new legislation takes effect next year.

Pastor Billy Lee, executive director of Blessed Grace Social Services, was quoted to have received distress calls from maids with multiple debts and had handled 110 instances of such cases who had taken loans from Toast Me. Some had even lost their jobs here due to turning to illegal money lending activities and “Toast’s aggressive collection tactics”. Sending letters of demand addressed to their employers and harassment messages. 

He has urged the authority to stop such illegal money lending activities immediately “to prevent Toast me from aggressively advertising their credit facility to foreign domestic helpers who have reached their borrowing cap of $1,500 with the licensed moneylenders”

Job Search Singapore - How to Excel in Search

How to Excel at Your Job Search in Singapore

Job search has evolved over the years, especially with the emergence of social networks and innovative job search sites such as Glassdoor and Hired.

In this article, we will explore all the resources you can leverage on during each the job searching and interview process.

Once you have mastered these resources, it will definitely put you ahead of the other job applicants when it comes to finding and landing your dream job.

Job Search Channels

Are you only seeking out new job opportunities via traditional job aggregators such as JobStreet and Indeed, or directly on a company’s career page?

If so, you are missing out on a lot of job opportunities that might not be listed on either channel. An article by Payscale estimate that as much as 80% of new jobs are never listed but are instead filled internally or via networking.

However, you can actually discover this hidden world of job opportunities through one simple action — building up your LinkedIn profile.

You can start by connecting with all your past business contacts, friends and acquaintances.

With this simple action, LinkedIn will let you know if you have any connections currently working in the company you are applying to, and you can approach these connections for a referral!

Another channel that you can tap on is actually recruiters or headhunters, and one way to get discovered by them is to complete your user profile on websites like LinkedIn, Jobstreet or Indeed.

Often, these job search websites provide a tool to recruiters to filter and find the talent they need for their customers. And if you dutifully fill up your profile with all your skills and experiences, you will often find the right opportunities knocking on your door.

Job Search: Interview Preparation

After a few weeks of networking and profile filling, you finally got an interview offer from your dream company.

Now is the time for you to shine and you will be wise to be fully prepared for it. Here are a few resources you can leverage on:

  1. Company website
    You MUST read through the company website. Find out how the company position themselves, what their culture is like and what products they are selling. You don’t want to be caught dumbfounded when asked: “What do you know about us?”
  2. Google News
    Find out what are some of the latest media release or news about the company. They are great icebreakers and can quickly help you build a rapport with your interviewers.
  3. Competitors
    Try to find out who are the main competitors and how they compare. Websites such as G2Crowd, Owler, Quora can provide you with the answers you need.

Once you have familiarised yourself with the company and landscape they are operating in, it’s time to prepare for all the possible interview questions.

Here are some great articles that tackle this:

31 Common Interview Questions and Answers

Top 10 Common Job Interview Questions and Best Answers

Understand what are some of the most common ones and rehearse your answers multiple times. This way, there is a lower chance you will be caught off guard during your interview.

Best of luck in your job search!

Illegal Money Lenders on Facebook

Are Licensed Money Lenders on Facebook Allowed to Advertise in Singapore? Be Careful!

Illegal Money Lenders on Facebook

Licensed Moneylending is a strict business in Singapore with various levels of restrictions for both online and offline presence. However, with the rise of digital media and the ease of digital advertisements, some moneylenders (illegal and legal) are turning to creative techniques to acquire more customers. Social media has made it an equal fighting ground for everyone. Illegal Money lenders on Facebook or unlawful lenders are now using social media to push creative new ways to attract customers.

Facebook Advertising Guidelines. No loan ads.

Facebook Ad Review Process

Facebook Ad Review Process

Facebook has 30 types of ad content that are not allowed (prohibited) to be advertised on Facebook. One, in particular, points out to the moneylending and finance industry.

“Payday Loans, Paycheck Advances, and Bail Bonds

Ads may not promote payday loans, paycheck advances, bail bonds, or any short-term loans intended to cover someone’s expenses until their next payday. Short term loan refers to a loan of 90 days or less.”

This strikes out as a strict advertising regulation for moneylenders, denoting payday loans and the likes of such are not allowed for money lenders on Facebook. Any forms of ads or sponsored content on Facebook for payday loans are not allowed on Facebook. Hence money lenders turn creative or get businesses to churn creative mediums for them.

Cloaking for Money Lenders on Facebook

This was a law raised in light of pressure to protect vulnerable users. Cloaking is a technique used by advertisers, spammers and companies to bypass the moderators and algorithms on Facebook.

Illegal Cloaking on Facebook - Infographics

Illegal Cloaking on Facebook – Infographics

A website or link is presented to the users that may appear legit, however, they are redirected to another version of the site or an illegal site to collect information. It may lead to misleading information on the website and taking up loans or financial products that might not seem favourable to them.

Companies like Facebook are trying hard now to protect their own users from harmful and deceptive financial products rather known as a “bad ad”. These bad ads can range from counterfeiting to phishing to promoting of illegal financial products, something that is not advertised.

Facebook algorithms are getting stricter and tighter, however, new creative ways of companies bypassing Facebook regulations are interesting.

The advertising regulation law for licensed money lender in Singapore

The Ministry of Law has a strict set of rules that governs a licensed Money Lender dos and donts in relation to marketing and advertising. These rules were set to ensure that the society at large is well protected and also due to the increasing negativism on the way financial products are being wrongly promoted.

What is not allowed:

Paid-for internet links

Paid-for internet links (also known as “sponsored links”) through search engines such as any paid-for links from search engines, appearing on internet search engine results pages or on any other Internet webpage.

This means that paid links on any online mediums are not allowed. Ads on Facebook are strictly not allowed in this case.

The Ministry Of Law has a set of rules that governs what a licensed Moneylender may or may not do in relation to marketing and advertising. Obviously, these rules were set in place for good reasons – to ensure that society is protected. We have extracted some of the key directions worth understanding.

Online advertisements that are not on the licensee’s business website or in an online business directory. Note: For the avoidance of doubt, advertising on internet social media sites (e.g. “Facebook”) or video hosting sites (e.g. “YouTube”) is not permitted.

This rule also adds on to the list that disallows online advertisements of social platforms.

Directories on online medium which consist solely of listings and advertisements of moneylenders and which are advertised in any manner or which are engineered in the same manner as described in paragraph

Advertisements in the form of Short Message Service (“SMS”) messages and e-mails sent to the general public, patrons of the licensee or former patrons of the licensee.

Still Bypassing Money Lender laws

However, even with tight restrictions by technology giants and by the local government laws, companies still find innovative ways to bypass such systems. One such technique is start-up companies try to cut into this space by offering a system to provide loan quotes to customers. These loan quotes serve as an offering to potential borrowers as they are gathered by various different companies. These companies are in the umbrella of the startup and not publicly known. This shields illegal money lenders on facebook or even legal money lenders that might resort to such techniques to acquire new customers.

Money Lender on Facebook to get Loan Quotes

Money Lender on Facebook to get Loan Quotes

Hence a word of caution, always check and be careful of what you might be in for. Read the fine print, and there’s be sure of the laws behind borrowing money. Also, ensure that you have a firm grip on your financials and spendings.

Remittance vouchers the new Illegal moneylending scam

Remittance Vouchers the new Moneylending Loan Scam?

With the hard clamping down of illegal moneylenders and the tightening of moneylending borrowing rules, moneylenders are now starting to feel the pinch. In a new rise of moneylending schemes, one that uses remittance vouchers has caught the attention of Foreign Domestic Workers (FDW).

Remittance Vouchers Scheme

This new remittance vouchers scheme that has been hitting the news targets specifically at FDWs They are the prime targets because of the tightening of licensed moneylending rules which permits foreigners from borrowing over a certain cap. This new loan cap caused a new struggle amongst foreigner workers as they are unable to pay back the money they owed.

Under the new regulations, foreigners earning less than $10,000 a year in Singapore can borrow up to only $1,500 from all licensed moneylenders combined. Even with rising concerns about a sharp increase in maids taking out loans and ending up in debt.

It was revealed in Singapore’s Parliament last November that 28,000 maids borrowed from licensed moneylenders in the first six months of last year. This number is more than double the 12,000 who borrowed in the whole of 2017. In 2016, there were just 1,500 maids who took out such loans.

Since then, foreigners are turning to other moneylending sources and at times turning to illegal moneylenders. Their debt further increases as they start missing their repayments.

The Story of Kata

Kata  Store, a cellphone retailer at Lucky Plaza, sold remittance vouchers which provided maids to remit money and get a loan indirectly.

It works by allowing them to buy remittance vouchers of a certain value, of which they have to pay an upfront fee. They are then required to make high-interest repayments which in one case was paying up 45% more than the initial loan. What’s more is that administrative charges of $2 a day would be imposed if repayments are not met on the due date.

With the remittance vouchers, they will give it to the staff at Brunphil Express. They will then remit the cash back to their hometown.

Kata does not hold a moneylending license and is issuing loans that are disguised as instalment plans to maids who do not understand the consequences. This form of offering is causing people to end up in bigger debts.

There have been cases of foreign workers not being able to pay back loan sharks and ended up being recruited by them as runners. Some would even persuade their friends and colleagues to borrow money from them.

Some of the maids are being pressured to send money home thus leading them to borrow from illegal moneylenders. This has resulted in a slew of foreign worker scams too. Scam operators call and threaten potential domestic workers, harassing their employers making them pay money not owed.

It appears that the new rules have somehow affected foreigners living in Singapore although the loan cap ruling was initially introduced to allow them to avoid over-borrowing.

If you are an employer of a foreign domestic worker, do educate them about the problems of borrowing and they would be repatriated back if they borrowed from unlicensed moneylenders.

Advice on Borrowing

If you are thinking about borrowing, always borrow from a licensed moneylender or licensed financial institution. They undergo stringent checks by the government and ask for financial advice on their offerings. Make comparisons with other lenders and read the fine print. Clarify any questions before you attempt to make the loan.

Money Lenders Regulations and outlook for 2019

Money Lenders Regulations and Outlook of Money Lending Industry 2019

Money Lenders Regulations

The fast-paced financial industry is Singapore has brought about several new changes to the Moneylending Industry here and introducing new money lenders regulations that is both benefiting to money lenders and borrowers.

Hearing from public outcry, the Ministry of Law introduced new loan interest rate caps. This ruling caps the interest rate of loans issued by lenders to be at 4 per cent monthly. This indirectly borrowers from over-borrowing and at the same time the borrowing cost that a moneylender can impost is now capped at 100 per cent of the loan principal.

Not only extending to locals, foreigners are also better protected now. An aggregate loan cap of $1,500 across money lenders is applied to foreigners earning less than $10,000 annually.

However, even with this ruling to protect borrowers, foreign domestic workers (FDW) are now lured into the borrowing game and think of it was quick and easy money. Some money lenders exploit the situation and charge the 4% on top of late repayment fees of $60 monthly. This amount of total repayment does not help FDW as they are unable to maintain their loans and lead to stealing from employers or even criminal activities.

New Business Models, New Money lenders, New Money Lenders Regulations

Late last year, new moneylending licenses were issued. This is a first in six years as a one-time lifting of the moratorium (imposed in 2012) as part of a pilot scheme in light to the new money lenders showing promise in better protecting borrowers through business-led improvements.

The new business models shows usage of data to assess creditworthiness of potential borrowers, digitizing their business processes to lower cost and provide better lending terms to borrowers.

New Loan Rules

Since Nov 30, 2018, the first phase of the Moneylenders (Amendment) Act 2018 and Moneylenders (Amendment) Rules 2018 kicked in, aggregate loan caps are set to limit the amount borrowers can borrow from all licensed moneylenders combined.

These new loan caps restrict Singapore citizens and permanent residents with an annual income of less than $20,00 to only borrow up to $3,000 from all moneylenders combined.

For foreigners, a lower aggregate loan cap of $1,500 is set to those earning less than $10,000 annually. If they are earning between $10,000 and $20,000 a year, they can borrow up to $3,000. For those who are earning at least $20,000, they can borrow up to six times their monthly income.

Regulatory Framework

A regulatory framework is now implemented, whereby licensed money lenders must obtain a borrower’s credit report from the Money Lenders Credit Bureau (MLCB) before granting any loan. This bureau is a central repository of data on borrowers’ loan and repayment records.

Accurate borrower information must be sent back to the bureau with timely updates when borrowers repay their loans.

Similar to the casino self-exclusion rule, there is now a rule to help borrowers regulate or curb their borrowing behaviour. They can opt for the self-exclusion framework and licensed money lenders are prohibited from lending to any individual.

What’s more for Money Lenders Regulations in 2019

The second phase of implementation is to professionalise the moneylending industry. This requires all licensed money lenders to be incorporated as companies limited by shares with minimum paid-up capital of $100,000 and to submit annual audited accounts to the Registry of Moneylenders.

Unlicensed moneylenders: Learn about harassment tactics and avoid them

Unlicensed Moneylenders New Harassment Tactics and How to Avoid Them

Unlicensed moneylenders a.k.a loan sharks have been keeping up with technology and equipping themselves with new harassment methods, which led to the Singapore Police Force issuing a new advisory on it last month.

Getting New Customers

It starts from how to recruit new borrowers — instead of printing flyers and going by word of mouth, loan sharks have started buying databases of numbers and sending WhatsApp messages to them, offering loans at low cost.

These loan sharks will often appear to be legitimate businesses through having a business name, phone number and even a website.

Simplifying the Borrowing Process

After securing your trust, the loan sharks also understands that they should simplify the borrowing process in order to onboard new customers.

So instead of meeting up and asking for your financial details, all they need are some personal details like a screenshot of your identification card, company name and address, SingPass login details and even where your children are studying.

(Note: This should raise alarms about the legitimacy of the business. Licensed moneylenders are not allowed to ask for your SingPass logins and other personal details like where your children are studying.)

First Incentivise, then Lie

In order to further convince you, they will first put up a repayment plan that seems reasonable, but over time, they will come up with excuses to change it and forces you to abide by the new change.

“At first, it could be monthly payments, but next week they would say: ‘Hey your payment is up’,” she said. When she told the moneylender of the original terms, the usual reply would be that the guy who gave it had gotten into an accident.” – As reported by CNA

The New Harassment Tactics

Finally, after you paid back your original debts, and some more, you realised that you still owed 5 times the original amount you borrowed.

And when you failed to pay that, harassment begins. While the previous methods of harassment such as splashing of paints and drawing graffitis on walls are still in used, loan sharks have begun using methods that inflict more emotional harm.

One such method is to send unsuspecting strangers to your house through various means.

They might place a large order with food delivery services such as McDonald’s or KFC and send them to your house. Or they might lure unsuspecting male subjects to your place by pretending that their “dates” live there.

Other more sinister methods include threatening to burn your home by sending you a video of burning homes or taking photos of where your children study.

Sounds scary right? Because it is. And the best way to avoid all of the above is to not approach unlicensed moneylenders at all, and do due diligence before borrowing from any sources.

In the police advisory, SPF encourages the public to avoid unlicensed moneylenders at all cost, and if necessary, approach licensed moneylenders that are listed on the Ministry of Law’s Registry of Moneylenders website at https://www.mlaw.gov.sg/content/rom/en/information-for-borrowers/list-of-licensed-moneylenders-in-singapore.html.

Licensed Moneylenders Loan - New limits and aggregate loan caps

Licensed Moneylenders Loan: New limits and stricter loan caps

Rules are always changing in the moneylending industry, and it is getting stricter each round. The latest rule, imposes a limit on the amount of licensed moneylenders loan that a person may borrow from. With rules changing and tightening the past two years, learn how the new rules is going to change the industry again.

As the public outcry for tighter control of licensed moneylenders and better protection for borrowers, the Ministry of Law (MinLaw) kicks in the first phrase of the Moneylenders (Amendment) Act 2018 and Moneylenders (Amendment) Rules 2018.

The first phrase of Moneylenders (Amendment) implementation calls for aggregate loan caps to be set to limit the amount borrowers (Singapore citizens, permanent residents and foreigners) can borrow from all licensed moneylender sources.

How new licensed moneylenders loan affects you

The new loan caps permits Singapore citizens and permanent resides with an annual income of less than $20,000 to borrow up to $3,000 only.

Whereas those who earn more than $20,000 a year may borrow up to six times their monthly income.

For foreigners, a lower aggregate loan cap of $1,500 for those who earn less than $10,000 annually. If foreigners are earning between $10,000 and $20,000 a year can borrow up to $3,000. Whereas those who earn at least $20,000 can borrow up to six times their monthly income.

New Regulatory Framework

The Moneylenders Credit Bureau will be implementing a regulatory framework whereby licensed moneylenders must obtain a borrower’s credit report from the bureau before granting any licensed moneylenders loan.

The new rules also allow for a self-exclusion framework that aims to help borrowers regulate their borrowing behavior and partake in debt assistance schemes.

Once an individual has applied for self-exclusion, licensed moneylenders are prohibited from lending to this individual.

In order to strengthen the regulation of licensed moneylenders, the law will now require licensed moneylenders to get the approval of the Registrar of Moneylenders before employing or engaging any assistance in the business. This means the loan officers whom are speaking to potential borrowers are fully qualified and vetted.

Not only employees, anyone that wants to be a substantial shareholder or increase his or her shares in a licensed moneylender, prior approval from the Registrar is needed.

The next phase of implementation will begin in early 2019, which includes professionalising the moneylender industry and requiring all licensed moneylenders to be fully incorporated as companies limited by shares with a minimum paid-up capital of $100,00 and to submit to annual audited accounts to the Registry of Moneylenders.

These new slew of laws are here to stay and will only get stricter. This serves great for both licensed moneylenders and borrowers. Lenders can now have better understanding of borrowers and borrowers will now be able to control their own financial well-being better.