What are the fees that moneylenders can charge?

Singapore government provides assistance for its people, which open opportunities for numerous registered money lenders within the country. Earlier times, financial problems encountered by Singaporeans were aided by banks. Due to the bank’s high requirement for yearly income, enormous applicants fail to pursue their loans. Today, a vast change in financial help exists, and that is the easy and controlled conditions of licensed money lenders. Regardless of your annual income, they provide loans with low-interest rates.

This certainly captured your interest but before stepping to any lending agency, make sure that you are well-informed about the fees that these money lenders can charge.

Loan Contract: Between 1st of June 2012 and 30th of September 2015

Registered money lenders serve Singaporeans under the Singapore’s Financial Ministry Law. Thus, they are not permitted to deduct any fees that are not included in the legal documents.

Loans contracted on the dates given above are charged with six kinds of fees. Here are the situations that are subjected to fees that you need be familiar with.

Late Settlement Of Due Account And Interest

A borrower must know to pay or repay on or before the stated date within your contract. Remember, your loan is paid on an instalment basis to reduce paying difficulty. Most of the time, payment is in monthly terms. Therefore, you must pay it on a monthly basis. Failure to comply and you will be subjected to a fee.

Requesting Different Terms Of Your Loan Contract

A contract is a legal document wherein two parties participated and agreed on terms before affixing their signature. As a result, what was written there is believed true and is unchangeable. In any case that a borrower request for varied terms aside from what was stated there. Moneylenders are permitted to charge the borrower for a fee.

Issuing A Dishonoured Cheque

Cheque is the easiest way for borrowers to repay their loans, plainly placing an amount and sign. Always make sure that your account is credited. Otherwise, moneylenders will charge you a fee for each dishonoured cheque that you have issued.

Failed GIRO Withdrawal From Your Bank Account As Payment

There are numerous options in repaying your loans; one of those is a deduction from your bank account. Your account must have enough amount to cater you’re the deduction of your monthly bill. If it happened that upon withdrawing your payment the process becomes unsuccessful, the moneylenders will subject that for a fee.

Redeeming Loans Early And Ending Your Contract Early

Debtors might think that early redemption of loans and fast termination of the contract is fine but you will be penalised by the moneylender unless the clause in your contract says otherwise.

Recovering Loans’ Legal Costs

When a money lender recovered your loan, there are legal documents and actions that they need to complete. These actions have legal costs, and you are subjected to additional fees.

Loan Contract: With the effect from 1st of October 2015 

A new proposal was implemented in terms of loans; therefore, there are changes and additional things that need to be considered.

Lenders are only allowed to deduct the succeeding charges and fees stated below:

Not More Than $60 Charge For Each Late Monthly Settlement

To control the interest rates that a money lender can charge, this policy is implemented that only $60 maximum charge for each month for every late payment submission.

Not More Than $10 Charge Of Loan Principal Upon Approval

When your loan is granted, see to it that a moneylender deducts only $10 maximum from your granted principal amount.

Recovery Loans’ Legal Costs For A Successful Claim

Recovery of loans undergone a due process conducted by the court hence recovery fees are imposed only after a successful claim.

With all the charges mentioned above, total charges that a money lender can impose should not exceed the principal amount of the borrower’s loan. Protect yourself by understanding the law pertaining to loan recovery process and reach out to us for a recommendation of a licensed moneylender.

 

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