Unfortunately, with the current economic downturn, we are expecting to see more people turning to moneylenders for short term loans.
Below are the advice for people who turn to moneylenders to carefully consider the following before approaching any moneylenders:
1. The compounded interest rates mean that borrowers could end up paying more than 10 times the original loan amount.
Make sure that :
– The interest on the loan cannot exceed 4 per cent a month.
– Late interest also cannot surpass 4 per cent a month.
– Moneylenders can charge a fixed late fee on borrowers, limited to $60 a month. There are no other fees allowed.
2. There are avenues for better-regulated loan options.
Pawn shops, for instance, are less risky. The loan cannot snowball and if the loan cannot be repaid, the worst that can happen is that the pawned item is lost.
3. Borrow from friends or family, or seek help from the Credit Counselling Singapore if their debts have gone out of control.
4. Do not attempt to borrow from unlicensed moneylender or loan shark that send you SMS or whatapps.
Always check the valid licensed moneylender with Ministry of law website before you approach them.