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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.

Get the best guide to licensed moneylenders in Singapore

Complete Guide to Licensed Moneylenders in Singapore in 2016

We are counting down to the last weeks of 2016, and like every industry out there, it’s always good to do a recap on what has happened in this past year so as to keep everyone on the same page. On the new rules and regulations reminder on some of the pointers to look out for when borrowing from licensed moneylenders in Singapore.

The launch of Singapore Moneylender Credit Bureau in March 2016

This is one of the most important development for the year because finally, all the licensed moneylenders in Singapore would have access to a borrower’s past and current borrowing history. This is especially useful in identifying errant borrowers who are likely to default on their loans.

Most Licensed moneylender benefit from this new act, as they can now tap onto the information by the Moneylenders Credit Bureau to affirm their loan assessment.

This will curb excessive borrowing and “help debtors to keep their loan commitments at a more manageable level”, DP Info said.

“We’ll be able to know how much a borrower has borrowed from other moneylenders, so that we won’t over-extend the loan,” said Mr Peter Tan, vice-president of the Moneylender’s Association of Singapore.

We will be able to see the overall effect of this later when after we do a cover on the 4% interest rate cap.

Teenagers are Increasingly Being Lured to Take Part in Loansharking Activities in June 2016

Compared to the same period last year, there is an 600% increase of youth loanshark runners. This is due to several reasons such as new method of recruiting via social media. These advertisements are usually very vague on the job scope but promises high returns for a small amount of work.

After luring students in, they will then try to entice them to do the job by offering huge amount of cash.

This showed that while the licensed money lending industry is controlled by the government, the government still didn’t manage to completely weed out unlicensed moneylenders in Singapore.

Implementation of 4% Interest Rate Cap for Licensed Moneylenders in Singapore (July 2016)

July is the start of the gradual implementation of 4% interest rate for licensed moneylenders in Singapore.

Before this rule was implemented, there was no interest rate cap for borrowers earning more than $30,000 annually. This led to exorbitant interest rate of as high as 1000% per year by some erratic moneylenders.

With the new measures kicking in, licensed moneylenders in Singapore will be restricted to maximum rates. This include the new ruling that they cannot charge interest of more than 4 per cent per month plus this has to be on a reducing balance basis.

Should a borrower be late in his repayments, licensed moneylender can then charge a late interest, however this late interest must not exceed more than 4 per cent.

The limit extends to charges on late payments: A similar maximum interest rate of 4 per cent a month, while late fees will not exceed S$60 a month.

The total borrowing cost will be capped at 100 per cent of the original loan to keep debts from spiraling. Additional fees for, say, early loan redemption or unsuccessful GIRO deductions will not be allowed.

This has caused some repercussion within the industry, which we will see in the last pointer.

Reduced Debtor Loans Due to Cap on Interest Rate

Blessed Grace Social Service, an organisation that helps debtors to negotiate their borrowing deals, said that there has been a reduction in loan amounts since the introduction of the 4% cap — from $3-5k to about $1.5k on average.

The number of moneylender that one debtors owe also reduced from 10-15 to about 5-8.

This also led the moneylending industry to be more careful as they are more likely to make loses due to defaults because of the lower interest rate. Hence, some licensed moneylender in Singapore isn’t willing to lend to new customers due to the higher risk.

Johnny (not real name), a director of a licensed moneylending firm, said “I believe the loan sharks are benefiting from this because (for) the licensed moneylenders, nobody wants to give out loans to new customers,” he said.

To sum it off, 2016 has been a year of change, due to the implementation of new rules and regulations. Most of it has been set in place to help control debtor’s borrowing amount and borrowing ability.

But the restriction might have also start pushing some borrowers back to loan sharks and unlicensed moneylenders. So how do we find a balance between all of these in 2017? It will be something for the government to ponder on.

Unsecured Credit Limit New Changes in Singapore by MAS

Unsecured Credit Debt New Limits in Singapore: Find out Now

Singapore: Applied lots of credit card recently? Ever had friends who are debt-ridden by their credit cards? The Monetary Authority of Singapore (MAS) will phase in tighter limits on credit card debt and other unsecured credit facilities over four years to allow more time for borrowers to cut their debt.

This was a drastic change instead of the originally imposed idea (20 months ago) of implementing the limit at once this June. The new credit limit change offers a big lifeline to consumers who have overextended.

Unsecured Credit Limit in Numbers in Singapore

Unsecured credit is borrowing that is not backed by collateral. The borrowing limit limit applies only to interest bearing balances incurred on unsecured credit facilities such as credit cards and unsecured personal loans.

These unsecured credit limits are not applicable to loans for medical, educational or business purposes. Borrowers with annual income of S$120,000 or more, or people with net personal assets exceeding S$2 million will not be subjected with the new borrowing limits. Over-extended borrowers in Singapore total 84,000 who owe S$7.5 billion(source MAS).

What does Unsecured Credit Changes

With MAS recent annoucenment, the new limit caps on a person’s total amount of credit card and other unsecured debt will be slowly implemented in phases:

— June 1 2015, the unsecured debt limit will be 24 times the monthly income

— June 1 2017, the unsecured debt limit will be 18 times the monthly income

— June 1 2019, the unsecured debt limit will tightened further to 12 times the monthly income

How does new unsecured credit limit affect me

How does new unsecured credit limit affect me

This new time measures allow borrowers up to June 2019 to make the transition to adjust to the new credit limits. The increased time given were brought about following feedback from the public and the advice of the Association of Banks in Singapore, and Credit Counselling Singapore.

Although most unsecured borrowers in Singapore borrow within their limits, but a small portion still have significant unsecured debts.

How does new Credit Limit Affect You?

Financial institution (FIs) are no longer allowed to granted further unsecured credit to an individual whose unsecured borrowing exceed the limits. So if an individual exceeds their limit, they will not be allowed to apply for new credit cards.
Banks in Singapore are supportive of the new move as this allows more time for borrowers to repay their debts. This allowed banks more time for compliance with the new law. Unsecured Credit provides good margins for banks as interest rates goes up to 24 per cent per annum.

What if I Exceed my Unsecured Credit Limit of 12X

There is a help centre whereby one can seek help from the Repayment Assistance Scheme (RAS), a centralised debt repayment solution by Credit Counselling Singapore in partnership with the banking industry.

Under RAS, debt amount if is in excess of the credit limits of 12x / 18x /24x of your monthly income will be subjected to a lower interest rate of 5% per annum. This amount can be paid in a span of 8years and will certainly help to reduce debt burden. This allows highly indebted borrowers to have a assistance scheme. Borrowers who are eligible for the scheme will get letters from their financial institutions with information on their outstanding credit debt. Learn more about RAS and how it works 

How can RAS help me with my unsecured credit  debt and repayments

How can RAS help me with my unsecured credit debt and repayments

Interest Rates Take a Hike with rising Sibor in Singapore. Look at how it will affect you.

Interest Rate Spikes & Latest in Moneylenders News

Money, money and more money! The recent news about the US interest rates hikes has hit our shores in Singapore and the news is not entirely encouraging.

The three-month Sibor, which is used to price most loans and mortgages here, has been inching its way upwards due to interest rate hike in the United States and a weakening Singapore dollar versus the greenback. The recent announcements by MAS to reduce the Singapore dollar from appreciating aims to keep the Sibor elevated.

The Sibor is fixed daily by the Association of Banks in Singapore based on quotes from banks on what they expect to pay for interbank loans that day. In short, it is affected by liquidity in the banking sector.

“The reduction of the appreciation slope could keep pressure on the US and Singapore dollar exchange rate and thus could ensure Sibor remains at current levels … This move by MAS helps keep Singapore policy on a stable footing, and we expect it to be modestly beneficial for Singapore bank earnings,” analysts from Morgan Stanley said in a research note.

Interest Rate Hike: What does it mean for You?

Many housing loans offered by banks are tied to three-month Sibor. Oversea-Chinese Banking Corp (OCBC), for example, has 3 types of home loans and one that is currently offering home loans at three-month Sibor plus 0.85 percentage points for the first three years, according to its website. Lending rates are reviewed every three months. As the Sibor is set to increase, so will the interest rate rise. Home owners will eventually face higher mortgage payments.

“We had expected the bullish move in the SOR and Sibor since last year,” says UOB economist Francis Tan (source)

Analysts are looking at further upside to about 1 to 1.2 per cent at the end of the year. Effectively leading to an interest rate of about over 2% for home loans.

Let us assume an outstanding housing loan of S$500,000 and 20 years remaining. With the current interest rate of 1.5 per cent, this works out to a monthly payment of about S$2,410.

If the interest rate is increased to 2 per cent, the monthly payment would rise to around S$2,530. Should the rate rise to 3 per cent, the monthly payment would be S$2,770.

What to Do Next with Higher Interest Rate?

Higher interest rates charged by banks affect your loans directly. Thus you will see your loans, home mortgage loans, renovation loans slowly inching its way up.

Hence start reviewing your loans! For example, review your home loan packages every two to three years. Look at the trends Conventional wisdom has it that you should review your loan package every two to three years, or before the promotional period ends and your bank raises its premium on the interest you pay, which increases your monthly instalments.

In short, think long term and look around for good deals. Always negotiate with the bank on refinancing options.

Latest in Moneylending Industry Singapore

DPM Teo added that the improved situation was due to the tough laws enacted, strong enforcement efforts against loan-shark syndicates and the high level of community support in the fight against unlicensed moneylending activities.

According to DPM Teo, about 1,900 people were arrested for unlicensed moneylending and related harassment offences on average yearly between 2011 and 2014, while about 2,600 were convicted in court for these offences.

Debt Collectors in Singapore creating a fuss & harrassment at Funan Digital Mall Singapore

Debt Collectors in Singapore creating a fuss & harrassment at Funan Digital Mall Singapore

Seen the recent hype about public harassment during working hours? Debt collectors created a ruckus at Funan Mall over unpaid debts. Moreover, this was during working hours infront of the public eye.

With clamping down on unlicensed activities and harassment cases, this is looking good for us licensed moneylenders at Empire Global. The image of licensed lenders is changing for the better as tougher laws are weeding out bad lenders. Thankfully, the ruly debt collectors have been arrested for unlawful assembly.

Sources
http://business.asiaone.com/news/what-do-about-home-loan-interest-rates-rise
http://www.straitstimes.com/news/singapore/courts-crime/story/debt-collectors-who-created-scene-funan-mall-foodcourt-arrested-po?page=15

Asian Couple calculating their loan

Repayment Loan Plans – Choosing the right one

Singapore – Repayment plans are the next most important thing to think about when you are applying for a loan. The first is of course the loan amount. Deciding your repayment plan and budgeting your financial situation will allow one to make a wiser decision on their loan plans. There are several repayment plans to choose from and many money lenders offer these plans. Some minor variations in terms of loan amount being dependent on the length of repayment chosen. Larger amounts typically requires a longer repayment plan as its allows adjustments on the money lender to accommodate to the loan request.

What are the Repayment Types available?

Weekly Loan Plan (Lowest Interest Rates)

This repayment requires borrowers to make payment every week. A typical repayment plan spans 5weeks and offers the least interest rates. If your loan amount is small, it is best to choose this form of repayment to avoid unnecessary interest charges.

Bi-Weekly Loan Plan (Mid-tier interest, Small Flexibility)

This repayment requires borrowers to make payment every two weeks. A typical bi-weekly plan spans between 2-4 bi-weekly repayments. This loan is usually higher in interest as compared to the weekly plan. However it gives borrowers a small amount of flexibility to coup with the payments.

Monthly Loan Plan (Medium Flexibility, Higher interest)

This repayment requires borrowers to make payment every month. Depending of the financial needs and situation of the borrowers, monthly loan plan can span up to 10months. This plan allows better flexibility for borrowers to cope with repayment.

Open Monthly Loan Plan (Highest Flexibility. Large loan amount)

This repayment requires borrowers to make minimum interest every month.This loan provides the highest flexibility and usually used for larger loan amounts. Should the borrower be unable to cope with the interest rate, he/she can opt to pay only the interest amount each month. If there’s any extra cash that the borrower wishes to repay, he/she can choose to make particle principal principal.

The bottom line is clear and simple. So long as you keep on top of your repayment scheme, all you have to pay is merely just one transparent interest amount, at fixed monthly interest rate for the agreed duration of your loan, plus the principal loan amount you have borrowed. Of course, each loan we offer you is subject to meeting our minimum requirements. We are more than happy and willing to clarify any aspect of the loan agreement with you, including the loan amount and repayment schemes.

What if I default?

Although it is unwise to default on a repayment plan but in these times of difficult economy with the addition of the high cost of living, it has put lots of people on financial strains. This is where reputable loan companies will help and advice you. Ask for a deferment on the repayment by paying a fraction of the repayment or request for a variation plan. Borrowers can also opt to switch to a longer repayment plan if they cannot afford to make the required repayment.

Our advice when you get a loan?

There are many loan repayment plans to choose from and each have different advantages. Depending on your monthly salary and income, always choose the plan most beneficial to you. Here’s some advice on seeking a personal loan plan.

  • Always seek out a reputable and licensed moneylender to give yourself a piece of mind. Seek out loan quotations from lenders and choose them wisely.
  • Be responsible to your loan repayment. By being on time with your loan repayment, you build a good credit line which allows you easier access to future loans with larger amounts being approved.
  • Be aware of the costs of full loan repayment including the principal amount an interest. Ensure that you have the financial means to meet these repayment plans
  • Ask for advice from the loan officer. They will be most pleased to hear your end of the story and help you on your repayment choice.
  • Loan officers are humans too. If you have difficulties repaying or need money, opt for a reloan or ask for some flexibility in your loan plan.

In short, be realistic on your ability to repay the loan punctually. This allows you to save on interest rates and manage your loan well.

Empire Global is a reliable money lending institution and have loan officers that are seriously dedicated to helping their customers. Loan officers here always ensures that any person applying for a loan will be given adequate information on how interest rates or additional charges are calculated. Empire Global has been providing speedy loan application approval with competitive interest rates. If you are Interested in getting a personal loan from a respected company then contact Empire Global staff today and speak with them on your financial position.

Budget 2014 Singapore and how it affects money lenders and borrowers

Budget 2014 Singapore for Moneylenders & Borrowers

Budget 2014 Singapore. How does it affect a borrower? 

Bishan – The no. 1 important question in the most anticipated current affairs of Singaporeans and businesses in Singapore. From the wage workers to the highest salaried white collar people. From small businesses (SMEs) to large corporations (MNC). Budget 2014 Singapore affects everyone in every way.

This is why we have this special article on Budget 2014 Singapore . How it affects us as borrowers and money lenders alike   in Singapore. Singapore’s Law Ministry new plans this year’s Budget 2014 Singapore. In order to avoid unlicensed  moneylenders from exploiting lenders, here are some of the measures in place this year.

  • The Singapore Law Ministry intends to establish a new central credit bureau. This bureau will allow “tighter controls” over the total amount of unsecured credit an individual can borrow.

  • A review of the interest rate cap and considerations on further restrictions on fee charges (early redemption, loan termination charges)

  • A new regime that will allow bankrupts to be discharged within clear timeframes.

Here’s what the current fee structure officially on  IPTO (Insolvency & Public Trustee’s Office) .

From 1 June 2012 onwards, money lenders are only permitted to charge six types of fees:

  • For each occasion of late repayment of principal or interest;
  • For each occasion the terms of the loan contract are varied at your request;
  • For each dishonoured cheque issued by you;
  • For each unsuccessful GIRO deduction from a bank account, as payment to the moneylender;
  • For early redemption of the loan or early termination of the contract; and
  • Legal costs incurred in the recovery of the loan.

Any other fees are not permitted, and are hence not enforceable by the money lender.  An official guide can be found from IPTO for further review

Why the need for change?

Primarily, the number of complaints against moneylenders have been on the rise. Recent news of money lenders in heartlands (Toa Payoh and Ang Mo Kio) have triggered a spate of concerns on easy credit. As compared to the past where they usually operate from areas such as Chinatown and Beach Road. Recent cases of errant money lenders have been sprouting out. Some examples are those who have been furnishing false information  or those granting limits above the standards.

The future in Budget 2014 Singapore?

In short, moneylenders will be having tighter rules on lending policies. Fee charges review. And a new bankruptcy policy. And how does it affect you as a borrower?

For the uninformed borrowers, it becomes tougher for bad money lenders to accumulate charges on the borrower. A better way to borrow money from licensed moneylenders. With this in mind, you will make a better choice in choosing your next payday loan or foreigner loans.

How Budget 2014 Singapore affects moneylenders?

Budget 2014 Singapore affects money lenders in several ways. The new schemes allow better ways to establish moneylending.  It allows money lenders to establish a better understanding of the situation and a better relationship with the borrowers as they can better control their limits. Borrowers will benefit from a better fee structure. Are you affected in this year’s Budget 2014 Singapore? Share with us on how it has affected you . 

How Budget 2014 Singapore affects borrowers?

With the new schemes it will allow borrowers to be more educated and informed. Borrowers can benefit from the new fee structure and limit caps. This prevents themselves from underestimating their loan amounts and repayment policies.

What is going to happen to Empire Global?

At Empire Global you as the borrower, are our customers. We offer better flexibility in terms of overall policies and fees. We have long anticipated this move by the government. The rampant growth of moneylenders in Singapore has led to increasing numbers of unethical moneylenders gaining from the stress of borrowers.

We at Empire Global want to prevent that. We have continually improved our service quality to differentiate out from the rest (illegal money lenders, unethical licensed moneylenders) and constantly learn from our borrowers to better service them.

Foreigner Loan Made Easy

Foreigner Loan – A Complete Guide

A guide to getting a Foreigner Loan

New to Singapore? Working in Singapore as a foreigner? Unfamiliar with financial terms and unable to secure a loan from the banks? In need of financial aid quickly?

Does any of these above mentioned sound like you? The good news is that in Singapore, it’s easy to get a foreigner loan to help you in times of financial crisis. There are a lot of licensed moneylenders and banks willing to speak to you on loan assistance. Most will be patient and will take their time to understand your situation and assist you.

For businesses like us, it’s better as most people will take debt more seriously in a foreign country. Hence this makes the application process simpler and easier.

Why would I need a Foreigner Loan

There are things that might crop up at the last minute. In Singapore, medical fees are expensive for foreigners and these are only minimally subsidized by the employer. As a foreigner, you pay lots more for medical services. There are also visa issues or legal fees that you might run into over the course of working in Singapore. Not to mention the escalating housing rental. All this takes up a toll on your salary and this is why most foreigners consider taking up a foreigner loan.

A 3 Minute Foreigner Loan Application Process Guide (Singapore)

In Empire Global we like things to be simple. Therefore, we have written up a complete guide for you to obtain a foreigner loan. At the same time you can apply online or call us and we would be most willing to listen and work out the details with you. Just post us questions on anything about loans or advice on repayment policies and we can consult with you. The charge? Free of course!

Basic Requirements required from Money Lenders

These are basic requirements that a licensed money lender would need. It would quicken the process if you are able to fulfil all the requirements. An employment letter plus a valid working pass or your own passport is the minimum for an application.

  1. Have a passport, work permit, valid E-Pass or an S-Pass (required)
  2. Has an appointment/employment letter sent from their company. (required)
  3. Have an existing residential tenancy agreement.
  4. Have PUB bills, phone bills or a tenancy agreement that reflects your salary.
  5. Obtain a bank statement for the past 6 months.
  6. Working in Singapore as a full time worker and obtain an employment letter.

Steps to getting a Foreigner Loan

  1. Get ready all the above requirements and documents
  2. Submit a loan application online with us
  3. Or Give us a call directly
  4. Wait for approval! Usually less than an hour

Our Empire Global Foreigner Loan Features

  1. We allow you to pay back your loans in monthly installment plans
  2. We have made packages, flexible to suit your every need or situation
  3. We have made easy structured repayment packages for you to understand
  4. An instant approval process once all the documents provided are approved
  5. Friendly bilingually* trained loan officers to assist you (Chinese and English)

As one of the leading and most trusted, licensed loan companies in Singapore, you can trust us on our reliability and service standards. Empire Global has the correct expertise and experience in helping you. Our personalized foreigner loan packages are made to suit you.

Satisfied Foreigner with their loan

Satisfied Foreigner with their loan