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.

Credit Card Debt and Bad Debts in Singapore

Credit Card Debt, Bad Debt and Usage in Singapore

Credit cards, with its convenience and high amount of rewards, continues to be the preferred payment method over cash, bank transfer and e-payments in Singapore.

According to the Global Payments Report by Worldpay, this is especially true for online purchases, where credit card had a 67 percent share of all payment methods.

And with the rising popularity and frequent occurrence of online sales events such as Black Friday, Singles Day and the upcoming 12.12 event, this meant that credit card usage has soared through the roof.

However, more credit card spending, coupled with the rise in interest rates started causing some undesirable situations such as the rise in bad credit card debts.

Rising Credit Card Debt

Kuo Huo Nam, Chairman of Credit Counselling Singapore noted a disturbing trend — that is the rise in credit card rollover balance, with $5.6 billion at the end of September, which is not far from the all-time high of $5.8 billion.

This trend is also showing up in bad credit card debt. Monetary Authority of Singapore data showed that bad credit card debt (“written off debt”) has risen to $27.9 million in March this year, which is only four percent lower than last decade’s peak.

According to Yahoo Finance, this is mainly due to two reason — an increasing reliance on credit card usage and the rise in interest rates.

Credit Card Usage and Interest Rates Increases

The fight for market shares amongst banks has led to attractive rewards for credit card usage. Coupled that with the convenience brought by innovation from contactless payment, it is no wonder that Singaporeans are increasing their use of credit cards.

This has led to an increase in total billings per card to $500 — an all-time high in Singapore — which inevitably caused the rise in credit card rollover balance.

When you combine that with the hike in US Fed rate, it just means more debtors in Singapore are going to find it harder to repay debts.

How to Manage Your Credit Card Debts

With this in mind, it would be best not to default on your credit card loan and let it roll over month to month, as it could become an astronomical amount that might just be impossible to clear off.

If you have the habit of missing payment due to the sheer number of credit cards that are in your wallet, it might be time to evaluate all the options and decide which are the ones you really need on a daily basis.

Lastly, you can also make use of finance apps available on both the Play Store and App Store to track your finance so you will always know how much you have spent for the month right at your fingertips!

Unsecured Loan Rules and Comparison. Learn how it affects you.

Unsecured Loans Rules and Comparison: How does it affect you

Understanding Unsecured Loans

With the rapidly changing financial industry and laws imposed on it, Monetary Authority of Singapore (MAS) stepped in early this year to aid borrowers landing in excessive unsecured debts. A new rule of capping the unsecured loans limit was imposed.

The new rule prevents borrowers from further getting any unsecured loans credit from financial institutions should the borrower have unsecured debts that exceed six times his or her monthly income, financial institutions will not be allowed to provide any increase in credit limit or additional credit that will cause a borrower’s credit limit to exceed 12 times their monthly income.

The rule comes in a move to reduce the escalating debt problems in Singapore and led to a slew of changes in how unsecured loans work.

An Infographic by MAS on new measure to help individuals manage unsecured debt

An Infographic by MAS on new measure to help individuals manage unsecured debt

Secured Loans vs Unsecured Loans. What are they?

Secured Loans

Loans are secured if and only when borrowers pledge their assets to the lender as a form of collateral for the loan. Should their loan fall through when repayments are not met, the lender has the authority to sell the assets to recover the money due. If the money recovered is not enough, borrowers are liable to make up the shortfall.

Unsecured Loans

Unlike secured loans, for unsecured loan borrowers do not provide or pledge any form of assets to the lender as collateral. Therefore, interest rates for such loans tend to be higher as financial institutions or lending companies take on more risk.

Past financial records, monthly salaries, unsecured loans debt are taken into consideration whenever an unsecured loan is issued. Personal loans, credit cards are a form of unsecured loans.

What next? Afterthoughts of loans

Regardless of loan types, do be clear on the loan you are getting. The goal is to opt for a loan that best fits your needs and minimising the interest cost whenever possible. Managing your financial wealth is of utmost importance as you would not want to end in a spiralling debt cycle.

Always be clear on your loans, ask the loan officer during your session. When in doubt, do your due research or seek another financial institution.

Learn Foreigner Loan in Singapore

What You Should Know About Foreigner Loan in Singapore

Singaporeans and PRs have aggregate loan caps and self-exclusion framework for borrowing from licensed moneylenders to protect themselves and their families. But foreigners do not face the same restriction, and this has led to an increase in the number foreigner loan and problems that arises with it.

Foreigner Loans Increased 4.5X from 2016

The ministries have reported that foreigner loans increased from 7,500 in 2016 to 35,000 in the first half of 2018 with domestic workers making up a bulk of these loans.

Pastor Billy Lee, executive director of Blessed Grace Social Services said, “Many of these maids come with no money and a mountain of debt to their agents. By right they shouldn’t be borrowing any more money.”

This has led to problems for some employers as they are left to deal with the mess, which include harassments and unsolicited phone calls, left behind from their maid’s borrowing after sending them back home.

A Cap on Foreigner Loans in Singapore

The new cap on foreigner loan, implemented in Q4 2018, will affect foreigners holding any of the following passes: work passes, long-term visit passes, short-term visit passes, dependant’s passes and student passes.

The loans will also be capped based on the foreigners’ earning power.

Foreigners will also be able to protect themselves by applying for self-exclusion, which are already available to Singaporeans and PRs.

Foreigners who borrow from Unlicensed Moneylenders

To further reduce and limit the problems of borrowing, Ministry of Law has taken a hard stance on those who chose to borrow from unlicensed moneylenders.

All foreigners found guilty of this will have their work pass revoked, repatriated and barred from further employment in Singapore. Although employers can choose to appeal this on a case-by-case basis.

Education is Still the Most Important

Prevention is still always better than cure, and the ministries understand this.

So besides having these restrictions in place, the MOM and police will also step up education on the management and risk of borrowing from moneylenders for both foreigners and employers.

The rest of the moneylender restriction stays the same for foreigners — that includes the 4% interest rate caps on the loans and the sum of all permitted borrowing costs on any individual loan must not exceed 100% of the loan principal.

Our team here feels this is a great step in the right direction. Although most licensed moneylenders are already cautious when lending to domestic workers, having a cap in place will help inform those with less experience.

Credit Matters and why you should be aware

Credit Matters and Why you should be Aware

Your creditability of finance based on your credit history can majorly impact what you want to finance like housing loan, renovation loan, business loan or loans that taps onto your credit history. The reason why credit matters is that it affects the amount of loan or even the interest rate and repayment amount that’s dispensed to a borrower.

Financial institutions will check on your credit score when acquiring a loan, loan officers will vet through your credit history to give the proper advice and loan terms to a borrower.

Credit score is seldom thought about to most people, however credit matters as it affects directly the loan and interest rate and can even affect various aspects of your financial life or job. Therefore, it is paramount to keep your credit score in good shape.

Credit score is basically a number based on complex credit assessments by various institutions, this number makes credit matters greatly. It indicates the possibility of a borrower getting a loan and whether a financial institution will approve the loan application.

In Singapore, much of these credit assessment is kept in a credit report at the Credit Bureau Singapore (CBS). This shows your personal details, loans, payment history, bankruptcy records, credit limits, loan accounts and amount owing. CBS analyses these data to determine a credit score using various algorithms.

The fact that if you can’t get a mortgage or loan is likely due to your low credit score, and this is why credit matters in life. If you aren’t on time with payments, it impacts your credit score.

Even with job applications, a person’s credit history can be checked upon especially if the applicant is applying for a financial position.

How to improve your Credit Score?

It is important to keep to your payments on time, as repaying late affects your credit score greatly.  You could also reduce your number of loans or credit cards you have. This reduces the risk of having your credit score affected.

To get a copy of your credit report here, so you can review it and correct it if it is wrong, simply go to the CBS website at www.creditbureau.com.sg and request a copy.

Keeping in mind that credit matters, paying your loans on time and checking up on your credit score are steps to maintaining a good credit score.

Thinking of getting a loan or to better understand the loan application approach, contact our loan officers to find out more.

Rise of Online Shopping and how shoppers spend more

The Rise of Online Shopping Sales and How It Got Us to Spend More

What does 9/9, 11/11, 23/11, 12/12 have in common? They are all online shopping festival sales dates started and promoted by e-commerce companies to encourage consumers to buy and spend more online.

It all started from Amazon’s Black Friday Sale, followed by Alibaba’s Singles Day Sale, and subsequently, e-commerce companies started coming up with other dates to host their own online shopping sprees — think 9.9, 12.12 and some even has weekly sales deals!

Alibaba’s Singles Day Sales even managed to keep smashing its own sales record. They recorded S$34.6 billion during the sales last year, cementing it as the biggest shopping event in the world.

And Singaporeans love these bargain – CNA stated that consumers from Singapore formed the seventh biggest group of overseas shoppers in 2015, coming behind bigger spenders from Russia, Hong Kong, United States, Taiwan and Spain.

And we love these sales because it allows us to buy certain necessity at a bargain price.

For example, a recent homeowner can browse and bookmark furnitures in Alibaba’s Tmall and Taobao, and wait for the Singles Day Sales to purchase everything. This way, they can shop at the comfort of their own home and save money at the same time.

But while the sales can help certain group of individuals save money, it also makes a whole lot of people spend more than they normally would.

These companies have engineered ways to gamify the online shopping experience and made deal hunting seem like a treasure hunt.

For example, during most of the sales, the e-commerce platforms will list out some of the popular items and their sales price days or weeks before the actual sales.

This helps the e-commerce platform to get the word out that the sales is coming, and creates hype and a fear-of-missing-out amongst shoppers, which eventually lead to more sales during the actual day.

Lazada even had a online shopping game during the sales that allows people to get products from as low as 99 cents as long as their friends help them to slash the price of the product through their unique referral link.

So, one way to work these sales to your advantage, and not be controlled by your impulses during the sales is to do research beforehand and plan a shopping list of the items you need.

Instead of mindlessly browsing through all the deals, you go into the sales with a clear budget, goal, and only purchase the items on your list.

Besides that, one other way to save more is to look out for credit card partnership that the e-commerce sites have. Often you will be able to enjoy some cash back or in certain cases, earn some air miles!

Now that Lazada’s and Shopee’s 9.9 sales are over, maybe it’s time to start listing down the items you really need and start spotting deals at Alibaba’s Singles Day event!

Proposal to pilot new business model for moneylending industry

Proposals to pilot business models for moneylending

Moneylending industry has always rapidly evolved to adapt to the rising changes in the financial industry. Several laws have been proposed and implemented causing moneylending businesses to be disrupted. The advent of fintech creates new striking changes to how moneylending businesses operate.

Laws have been proposed by the Singapore government to further tighten the moneylending industry. The latest laws are updated on the 23rd of Feb 2018.  With news and complaints of illegal moneylending affecting citizens living in the suburbs, the government has been tightening laws and ruling out unethical businesses that have been taking advantage of borrowers.

Proposals to pilot new business models for moneylending

Empire Global is a leading moneylending company and has always kept customer needs close to heart. Without drastically affecting borrowers and their own business, Empire Global has always kept up to trend with their business models and looking at new ways to improve their own business model.

The Ministry of Law (MinLaw), has invited proposals to pilot new business models for moneylending which brings about the objective to better protect borrowers in the moneylending industry. Applicants will require paid-up capital of at least $1 million, to ensure sufficient financial standing. Assessment of the effective cost of credit and credit policies will be made. Successful applicants will be granted moneylending license for up to two years to implement their business model.

MinLaw intends to issue up to 16 outlets for the implementation of new business models under this pilot model.

Based on the news by MinLaw, Empire Global is looking at new ways to better to benefit the community at large and at the same time remain competitive in this tough moneylending industry. Going forth with the government suggestions, Empire Global has been researching on new financial models and open to all proposals or suggestions towards this movement.

How monopoly in the financial loan industry affects you

How A Monopoly in The Financial Loan Industry Can Hurt You

Monopolies happens in many ways — striking a deal with government, using unfair practices to shut down competitors or even through consolidating market shares.

While some monopolies are necessary to lower costs for consumers, most of them are not. Once a company gains majority market share, they can often use that power to fix prices or negotiate for unfair deals with smaller vendors.

Learning from The Grab-Uber Merger

The merger was big news for the private car hire market in Asia, but this is not Uber’s first merger with their competitor. It happened in China too. One year after Uber sold their business to Didi, both drivers and passengers are unhappy.

Passengers now find it more expensive and difficult to hail a cab because incentives for drivers have been cut, which resulted in lesser cabs on the road.

And just a few months after the merger here in Singapore, consumers are feeling the same pinch.

“Now, it’s been more than two weeks and I haven’t received other promotions. It used to be weekly promos without fail,” said Ms Joseph, who has reached the highest member status of Platinum.

Although Grab also said that they have been gradually shifting to the GrabRewards system which allows passengers to earn points to redeem one-off promo code.

But it takes so long to even redeem the cheapest $5 promo, that it no longer makes sense for a lot of riders to take Grab as regularly as before.

This then directly impacted the drivers too. Due to the increase in fleet numbers for Grab and lesser incentives for passengers, drivers found themselves waiting more to pick up their next passenger.

Just within this short time period, both riders and drivers are seeing huge decrease in value from Grab, and we can only hope this doesn’t get any worse.

Why Moneylenders Are Important to Prevent the Same from Happening to the Financial Loan Industry

Before licensed moneylender was set up, people who aren’t eligible to borrow from the banks nor have the luxury of borrowing from friends or relatives often have to rely on loan sharks or unlicensed moneylenders for financial loan.

This caused a lot of problem for the Singapore society since loan sharks are doing all sorts of brazen acts in an effort to collect back the debts including setting homes on fire, locking up flats and using paints all around the debtor’s flat.

However, the entry of licensed moneylenders managed to change some of that. With Singapore law governing and placing restriction on this industry, consumers are getting much better protection, and they do not have to worry about the same brazen acts from loan sharks.

Hence, the complete elimination of the moneylenders means illegal moneylenders will have complete monopoly over this segment of financial loan, which may lead to many more loan sharking activities, causing inconvenience and trouble for Singaporeans.

Are there any other monopolies that you can think of in today’s market?

Learn how to best review legal moneylender in Singapore

How to Best Review Moneylender in Singapore

Let’s recap on what to look for in a legal and reliable moneylender. We are going to list through several methods on how you can best review moneylender in Singapore, to provide you with good service and reasonable loan rates.

Quick Tips to best review moneylender in Singapore

There are several reasons why one would seek out a loan and there are several loan types to cater different needs. Hence regardless of the loan type (personal loan, payday loan or business loan), the licensed money lender is one of your best option in Singapore. Learn some quick tips on how to best review legal moneylenders.

1. Experience and years of service

Loan officers go through your loan application and request. They will aid you in identifying the best loan options to go through. They are also obliged to tell you all the terms in the loan such as length and number of repayments, interest rates of the loan. They will also understand and want you to borrow within your means as they still have to recover money from you.

This takes experience in servicing borrowers and also the business itself has been running long enough to understand the various changes that could occur in the moneylending industry and be up-to-date with it.

2. Licensed moneylenders will have you sign a contract

A formal contract is required by law for licensed moneylender with borrowers. The contract terms are drafted by a lawyer and contain the following:

Interest rates

  • Late repayment fees
  • Repayment period
  • Repayment amount
  • Legal terms

Hence it is vital to ensure that the loan officer guides and explains to you the terms of the contract before you sign. Never except a loan without fully understanding the terms. Some businesses are disguised as legal moneylenders but do not offer such contracts. Avoid them at all costs.

3. Approval Process. Do online checks.

More and more businesses are moving online. Convenience is vital to anyone now. Hence check out the moneylender online, read their website, their offerings and google reviews. Check out with them on the different loan options, do an online loan enquiry before heading down. Most legal moneylenders will reply quite promptly and accurately. The process is fast and you will not waste your time in heading down and be disappointed.

4. Check out Ministry of Law

The Ministry of law has a constantly updated list of licensed moneylenders. As licenses can be revoked due to ill business practises, it is good to check the most legal source of information.

Like shopping, you will compare the different offerings from different moneylenders. They will offer different interest rates so do look around and enquire to get the best loan options for yourself.

Learn from the Law Ministry’s guide to effective interest rates to understand how to make good comparisons between moneylenders.

Best Review Moneylender? Check on Google Reviews!

Looking for legit businesses? Like hunting for good food places, one has to check for reviews first. To best review moneylender, before heading down onsite, check on google reviews to seek out actual comments and reviews made by customers.

It’s a good place to identify legal moneylenders from the loansharks or illegal moneylenders and can be used as a comparison point between the other moneylenders that can be listed in google reviews.

How is the moneylender reliable?

One of the natural option to best review moneylender is to check the number of years that a business has been running is vital to identify its reliability and trustable. To be able withstand the ups and downs of financial crisis or economic slumps shows a business reliability and that customers see them through.

It also means that the business can tide through tough times and itself have to get a winning edge over others. Customers naturally trust them either through the years of running or the service that these companies provide.

A moneylender license is not easy to maintained. It is subject to checks on business practises, complaints and undergo stringent review by Singapore law. Licenses are limited and only businesses that provide proper legal loan services in Singapore can be issue such license.

Empire Global is always ready to serve and help our customers in getting the loans they require.

How to check company cares about privacy data policy

How to Check If A Company Cares About Data Privacy

Data privacy has been the talk of town recently due to the Facebook and Cambridge Analytica scandal. But even before this, data privacy has been an increasingly hot topic over the years.

This has propelled changes in data concerns and protection across all levels from individuals to governments.

On an individual level, people are wondering how much personal information are they giving away when they signed up for a free service such as Facebook or Google, and how safe is it?

A KPMG study on data privacy show “The average Singaporean consumer is not convinced that companies are doing enough to protect their personal data, and this in turn results in a lack of trust and hesitance to purchase online”

Across companies, executives increases their budget for big data security amid increasingly stringent data privacy law and corporate data leaks.

Finally, governments across the world worries about the power private companies wield with the amount of data in their possession.

So, as companies and governments across the world promises to safeguard your information better, how can you be sure that they are really acting on their promise?

Let us walk you through some of the most common things to look out for in a company’s website to see if they are taking your data seriously.

A Secure Website with SSL and HTTPS

Google encourages all companies to switch to HTTPS a few years ago and explains this one their website:

HTTPS (Hypertext Transfer Protocol Secure) is an internet communication protocol that protects the integrity and confidentiality of data between the user’s computer and the site.”

Our website is an example of this:

When using Chrome browser, you can easily see if a website has https via the url bar on top. If they are indeed on HTTPS, you will be able to see the word “SECURE” highlighted in green, and instead of http://, you will see https:// beside the company url.

Benefits of being on HTTPS includes:

  • Encryption: To prevent malicious actors from monitoring your online activities on the website
  • Data Integrity: Data shared between you and the company are secured and cannot be modified by outside actors
  • Authentication: To prevent phishing. You can always be sure you landed on the official company page.

Check for A Data Privacy Page

A data privacy page lays out how a company collects data from you and what do they intend to do with it.

So, if you are planning to submit sensitive information to a company — e.g. mobile number, name and NRIC. Remember to search for a PDPA policy on the company website.

You may take a look at our own PDPA policy at https://applypersonalloans.sg/pdpa-policy/

A quick read through our policy will provide you with some examples of important clauses a typical PDPA policy should include:

  • We do not automatically collect your data unless it has been given to us willingly to engage or inquire our services
  • We will only use your data within the company and this will data will NEVER be sold to any third party
  • We will take reasonable steps to secure your data
  • You can request to withdraw your consent to any use of your data or to edit your data via one of our hotlines.

As more companies place a bigger emphasis on big data in order to better understand their customers, you can be sure they will try even harder to get more personal information from you.

In some ways, this is unavoidable, especially if you wish to engage the company’s services. But you can better protect yourself by understanding what the company plan to do with your data.