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Legal Loan Singapore: Learn all about Moneylending Law
Equip yourself with the knowledge on what about legal loan Singapore and what is an illegal one so that you can be confident that everything you do with the moneylenders are under the protection of law.
If you have the time, we encourage you to read through everything in Ministry of Law’s Moneylending Guide, but read our guide if you just want to know enough to borrow with a peace of mind with a legal loan Singapore.
The Contract
*Tip: With the new law that kicked in on 1 October 2015, moneylenders can only charge you a maximum of 4% interest per month regardless of legal loan type or your income.
- See more at: Legal Loan Singapore
Equip yourself with the knowledge on what about legal loan Singapore and what is an illegal one so that you can be confident that everything you do with the moneylenders are under the protection of law.
If you have the time, we encourage you to read through everything in Ministry of Law’s Moneylending Guide, but read our guide if you just want to know enough to borrow with a peace of mind with a legal loan Singapore.
The Contract
- The moneylender must explain all the contractual terms to you, and you can request for further explanation if you are unclear. You are also entitled to a copy of the legal loan Singapore contract.
*Tip: Always take extra note on on the repayment schedule, interest rate and other miscellaneous fees. - The moneylender should not be able to lodge a caveat on the sales proceeds of your house. A legal loan Singapore contract does not entitle the licensed moneylender to lodge a caveat on the sales proceeds of your house.
- A moneylender can loan you any amount, as long as they are secured legal loan Singapore.
- However, there are restrictions on unsecured legal loan Singapore, and they are not allowed to work around these restrictions. So don’t trust any moneylenders who are willing to lend you money that’s outside the normal rules and regulations. Here are some of it.
- Up to $3,000, if your annual income is less than $20,000
- Up to 2 months’ income, if your annual income is $20,000 or more but less than $30,000
- Up to 4 months’ income, if your annual income is $30,000 or more but less than $120,000
- Any amount, if your annual income is $120,000 or more.
*Tip: With the new law that kicked in on 1 October 2015, moneylenders can only charge you a maximum of 4% interest per month regardless of legal loan type or your income.
- Your interest rate should only be calculated based on the amount you owed, not the amount you borrowed.
For example, if you borrowed $100, and you have already paid $20, only the remaining $80 can be included in the calculation of the interest. - Similarly to late interest rate, you can only be charged late interest for the amount of money instalment that you failed to repay, and not on the amount you borrowed.
For example, you borrowed $100, and you missed your first instalment of $20, you can only be charged late interest on the $20.
- Late payment charge – capped at $60 per month
- Admin charge – capped at 10% of principal of the loan
- Legal charge – ordered by the court in the case of a successful claim by the moneylender for the recovery of the loan
- Never give your SingPass User ID and Password
- Never let them keep your IC
- Never sign on a blank/incomplete contract
- Never leave without a copy of the loan contract
- See more at: Legal Loan Singapore