New Measures to Protect Borrowers!

Posted by admin
on January 27, 2016

Since the Ministry of Law (MinLaw) implemented the new regulations last year, some moneylenders have been trying means and ways to game the system through gaps in the rules. With effect from 1 October 2015, loans have been subject to the following caps . They include:

  • upfront administrative fee or not more than 10% of the loan principal;
  • interest of not more than 4% per month;
  • late interest of not more than 4% per month;
  • late fee of not more than S$60 per month; and
  • e) total borrowing cost of not more than 100% of the loan principal.

In a move to plug loophole exploited by errant moneylenders, The Registry of Moneylenders has issued a notice to all its moneylending licensees yesterday. Not to be confused with the changes to regulations, this list of measures is on top and beyond what was introduced last year and acts as a supplement to the Moneylenders Act and Rules. The new measures take immediate effect. We have quickly summarized the newly issued Registrar’s Directions and it is as follows:

  • Lenders are required to take a pro-active measure by being stringent on their criteria on who to offer loans to. For example, those who will face difficulties making repayments and thus start to incur continuous administrative or late payment fees, among other things.
  • Lenders are required to elaborate to borrowers of the terms and conditions of their loans. This includes information on how interests and other fees are computed and the scenarios on which such fees will be imposed.
  • Lenders are required to furnish the borrowers with a black and white cautionary statement on exploitative loans before such loans can be disbursed.
It has only approximately been 4 months since the implementation of the new regulations by the Ministry back in October 2015. While this is a clear move by the authorities to deter unfair practices and protect borrowers, it is not one to kill off the moneylending industry. The Government accepts that there is still place for the moneylending industry because some people still fall short of meeting the banks’ requirements for loans. Nevertheless, while majority of the moneylenders will applaud and welcome the supplementary measures to the Moneylenders Act and Rules (click on link for full Act) for its transparency, it is possible that some errant moneylenders will continue to look for ways to manipulate the system for their desired outcome.
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Fighting Organised Crime

Posted by admin
on July 19, 2015

On 14 July 2015, a new law was introduced in Parliament. The proposed law, the Organised Crime Bill, would grant authorities more powers in detecting and preventing organised crime activities such as drug trafficking, money laundering and unlicensed moneylending. The law also allows authorities to confiscate the benefits from criminal activities based on a ‘balance of probabilities’, which requires lesser burden of proof than criminal convictions.

This proposed law is a welcomed measure in our ongoing fight against loansharks and unlicensed moneylenders. These illegal criminal activities have always posed a serious threat to the legitimacy of the moneylending industry; it is heartening to know that more measures are being taken by the authorities to combat this issue.

Within the industry, there are also controls in place to prevent the facilitation of such criminal activities. Stringent checks are undertaken before disbursing a loan, in compliance with the Prevention of Money Laundering and Financing of Terrorism (PMFT) Act. Any suspicious transactions will be reported to the Registrar.

As a general reminder, licensed moneylenders are not allowed to send out messages to solicit the public to take up loans. We advise our readers to ignore such messages, and when in doubt, please contact the relevant authorities or legitimate moneylenders.

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Singapore Dollar rises against Malaysian Ringgit

Posted by admin
on April 16, 2015

What happens when one Singapore dollar can be exchanged for $2.7234 Ringgit? Singaporeans flock to money changers to indulge in one of its favourite national activity – queueing up! Yes, long queues were seen at many money changers yesterday when the ringgit fell to its lowest against the Singapore dollar in the last 30 over years. In fact, many money changers had signs put up to say that the Malaysian ringgit had already been sold out by afternoon.

The weakening Malaysian ringgit took a turn for the worse when the Monetary Authority of Singapore announced that it will continue to stand by its usual philosophy of a modest and gradual appreciation of the Singapore dollar. Since global oil prices has slid drastically in recent times, Malaysia, who is an exporter of oil has taken a hit.

The Singdollar gained after the Monetary Authority of Singapore announced on Tuesday that it would maintain its stance of a modest and gradual appreciation of the currency.

Meanwhile, Malaysia has had a spot of financial trouble lately. National revenue for the major oil exporter has been hit hard by the slump in oil prices, forcing the government to raise its deficit target for its 2015 Budget.

Other than investors who dabble in exchange investments, many Singaporeans are most interested in the Malaysian ringgit simply because of the proximity of Malaysia to Singapore. Many Singaporeans go into Malaysia often to do their shopping, buy groceries or just spend a weekend relaxing. Perhaps the new levy on cars entering Malaysia has also affected Singaporeans who go to Malaysia often and exchanging more ringgit at the opportune moment is even more important now. And then there is the new 6% GST affecting all shoppers be it Singaporeans or Malaysians in Malaysia.

Some Singaporeans may exchange more than they need for their trip to Malaysia to keep for the next trip.

Are you one of those in the money changer queues?

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Repayment Scheme to reduce debt

Posted by admin
on April 7, 2015

Not that it is much to cheer about if this piece of news is good news to you, because it means you are debt-ridden. But well, with news about the Repayment Scheme being rolled out by the Association of Banks in Singapore, you may be just slightly cheered, maybe even hopeful about finally clearing your debts completely. What does this scheme do and how can it help? Let us provide some insight.

The aim of the Repayment Scheme is to offer a much needed helping hand to borrowers, in a bid to help them reduce their debts over a period of time. This scheme is for unsecured debts only.

Who qualifies for the Repayment Assistance Scheme?
– It is for borrowers who have chalked up unsecured debt that is more than 12x of their monthly salaried income
– Eligible only if borrower has debts 12x their salary before June 2015
– Borrowers should draw an annual income of less than $120k
– Borrowers must not have assets of more than $2million

What is the Repayment Assistance Scheme?
– Successful applicants get a lower interest rate
– They can repay their debts within an 8-year period
– The scheme is rolled out together with new borrowing limits that makes new debts much more difficult

Which are the institutions that offer this scheme?
– DBS Bank
– OCBC Bank
– UOB Bank
– Citibank
– HSBC Bank
– If you are eligible, you will receive letters from the above financial institutions from mid April onwards

When is the cut-off date?
– 31 December 2015

Well, we certainly hope the above information will be of help to you. Of course, if it does not concern you at all, good on you too!

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What is SIBOR? On Housing Loan

Posted by admin
on March 30, 2015

If you have never heard of SIBOR before, you probably have not been reading the news lately or have no interest at all in getting a house for yourself. Yes, the increasing SIBOR has been all the rage lately and it is no wonder. Many people who have taken out housing loans pegged to SIBOR are feeling the pinch now as rates continue to rise.

What exacty is SIBOR? Let us try and explain it as simply as we can.

It stands for Singapore Interbank Offered Rate. It is fixed by the Association of Banks of Singapore and is an interest rate that is used between all the different banks within the Asian time zone when banks borrow from each other. Yes, banks do borrow funds from each other and this is the rate that they follow. SIBOR is regarded as a benchmark be it for the borrowing side or the lending side within the financial arena in asia.

What is the significance, you may wonder? You may not know it but home loans pegged to SIBOR have been popular with Singaporeans who are looking to finance their newly bought homes. Why is that so? Because, SIBOR has been believed to be much more stable than any other rates because of the relatively strong Singapore dollar. The loan option that is pegged to SIBOR is very much popular with home owners who buy property for their own usage. With short-term properties investors, however, it may not be their first choice depending on the market at the point of entry.

How is SIBOR faring lately? Not so good. In fact, there have been much grumbles about how SIBOR rates have been soaring and fear to not be stabilising any time soon. Well, that is another nugget of news for another time.

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Lee Kuan Yew passes away but Singapore stock market holds strong

Posted by admin
on March 25, 2015

More often than not, when a country leader passes away, the stock market will take a hit. As news broke of Singapore’s founding Father, Mr Lee Kuan Yew’s death in the wee hours of Monday morning, the Straits Times Index (STI) only closed 0.07 per cent lower. The STI is the benchmark index, indicative of Singapore’s stock market. In fact, the stock market remained mostly positive.

Mr Lee Kuan Yew had earlier been hospitalized for a long period of time and investors had feared that the stock market will be hit. However, according to most analysts, the impact on the stock market is expected to be minimal.

Why so?

Maybe it is exactly Mr Lee Kuan Yew’s foresight, steadfastness and strength that Singapore, regarded highly as a financial hub, stands on such firm ground. In fact, according to the CEO of DBS, having such a strong financial market is something that is unique to Singapore.

“Markets are deep and liquid. Our regulations and regulators are well respected. No wonder then, that what in a normal country might cause tidal waves of alarm will go through in the context of Singapore quite smoothly,” he said. (CNA, 23 Mar)

He also said that “There is recognition of the talent depth of this country, there is recognition of the transparency on the non-corrupt nature of the government. There is a recognition of the fact that this country has tenacity and the financial system has endurance. We will go on, we will build on the legacy and there is no doubt in my mind that Singapore will continue to be one of the great global financial centres of the century,”

Mr Lee Kuan Yew’s passing had set a gloom over the nation and it is evident that Singapore had deep love and respect for her founding father. Leaders all around the world has also been leaving condolences messages for Singapore and the Mr Lee’s family.

Will Singapore continue to prosper and hold its ground in the big world after Mr Lee’s era? This remains to be seen but with Mr Lee’s foresight and perseverance in building the nation from third world to first, the future of Singapore looks bright.

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Changes to Moneylenders Act?

Posted by admin
on February 17, 2015

After the recent case of harassment from debt collectors at a food court, there has been much talk about the governing of licensed moneylenders in Singapore. Now, rules are being reviewed and tightened, so as to better protect borrowers, especially those who come from lower income backgrounds.

The Moneylenders Act is now amended so that the Registry of Moneylenders have greater enforcement powers, which in turn helps in safeguarding borrower’s information from unlicensed moneylenders. Now, the registry can engage any person to help conduct frequent and stringent enforcement checks on moneylenders. Sharing information on borrowers with unlicensed moneylenders is now against the law.

Some other changes to the act includes mandating the use of Effective Interest Rate instead of the current Nominal Interest Rate for loans. Effective Interest Rate takes into account the compounding effect of the frequency of instalments. This means that the actual cost of borrowing is made more transparent and easy to see.

The last amendment to the Act was in 2008 but ever since, the moneylending landscape has changed and grown so much. These changes is timely and some may perhaps even find it overdue.

Changes to the Act affects about 243 licensed moneylenders in Singapore and will take effect from June onwards, giving the industry some leeway to adjust to the amendments.

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Choose a licensed moneylender, loansharks are nightmares.

Posted by admin
on February 8, 2015

We spoke to Alison, a 56 year-old mother of two who once borrowed a sum of money from loansharks and she called it a nightmare. Thinking that a small sum is okay and that she will be able to repay it soon or if not, since it was just a small sum of $2000, they would be lenient and give her time to repay her debt. Alison was not prepared for the nightmare that she was about to face. Always choose a licensed moneylender, loansharks are nightmares, she says.

From being a low-profile person to becoming someone the entire neighbourhood was talking about, Alison still feels traumatised by it. The loanshark runners did not even start small. They wrote her name all over the walls on the common corridor and splashed paint in every colour on her front door. One day, Alison woke up to her gate being padlocked and she was not even able to leave her house. People starting to talk about her. Whenever she went to the market or the food centre, all eyes were on her and she was embarrassed by all the attention.

Alison was almost forced to become a runner herself as she could not repay her debts. Luckily, a group of friends decided to help her out and she got out of her debt. From a small sum of just $2000, she ended up paying $8000 to the loansharks before they let her off the hook.

Alison’s story serves as a reminder that borrowing from loansharks should not even cross your mind. If you really need money, go to a licensed moneylender. There are many licensed moneylenders in Singapore who are regulated and who will not threaten and harass you like how loansharks do. Give us a call or drop us a visit! Quick Credit is your reliable Singapore moneylender.

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Benefits offered by Licensed Moneylenders

Posted by admin
on January 27, 2015

When you feel strapped for cash and are not sure what to do, do you really need to start mortgaging your assets and pawning your jewellery? Not necessarily. Licensed moneylenders could be your answer. Many Singaporeans do not know that licensed moneylenders differ greatly from loansharks. They are hardly shady and are legalised and licensed by the Registrar of Moneylenders.

The smaller amount you need, the better are your chances of being able to borrow from a licensed moneylender.

In Singapore, moneylenders who are licensed to run the business of lending money to those in need are required to follow strict rules, regulations and the law of course. In instances when they are unable to recover a sum of money from debtors, they can hire accredited debt collectors to do that on their behalf.

Licensed moneylenders will not and should not harass debtors like loansharks do. They whould not use violence on your or vandalise your property. If you do encounter such incidents, make a police report.

There are many benefits to borrowing from licensed moneylenders. Firstly, they are able to provide you funds with such flexibility unlike that of most banks.

Secondly, you will be able to get almost instant approval when you apply for a personal loan. In fact, if you have the financial documents ready, you can get your loan approved in just about 30 minutes!

Last but definitely not least, most banks will not extend a loan to borrowers with bad credit history. However, for licensed moneylenders, they are generally more relaxed and because loan amounts are usually smaller, they are more likely to approve your loans without much trouble or deliberation.

If you are looking for a moneylender with the lowest interest rate and offers you flexibility and expertise, look for Quick Credit!

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Debt Restructuring Programme to be introduced

Posted by admin
on December 4, 2014

Good news for those who borrow from licensed moneylenders. There are now plans by Credit Counselling Singapore to introduce a debt restructuring programme. Working with the Moneylenders Association, this programme is slated to be rolled out next year. There is hope yet, for borrowers who have accumulated multiple debts.

At the moment, such debt restructuring programme is already in existence but only with banks. What it does is lay down rules of the amount a debtor should pay off, of his loan, every month, with a specified interest rate and stipulated time period. Without such a programme with licensed moneylenders, there are persistent issues with borrowers who turn to various moneylenders and accumulate multiple debts and end up being unable to repay the loans.

This should also be good news for licensed moneylenders though it may take effort to convince all moneylenders of the benefit of this structured programme. For moneylenders, debt amounts are usually smaller than those of the banks and debt collection from those who default on payments prove to be costly and inefficient considering the smaller amounts owed.

Without a structured programme to manage debt repayment within moneylenders, the current situation is that 10-20% of loans are usually written off with default rates of 30%. On the contrary written off debts from credit cards (banks) stand at a significantly lower percentage of 4-5 of average rollover balances.

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