A crime committed should be punished. It is the natural flow where crimes and justice are in order. Such would be a situation some people may find themselves in when they participate in particular moneylending in Singapore.
Many times over, Singapore has proven it’s a prosperous country. Moreover, the country has a high regard for its laws and regulations. It is among the main reasons why Singapore rose to where it is today.
The moneylending industry can have its complexities. It’s much more challenging, especially for moneylenders, debtors, and the government. As a result, there is a dire need to provide guidelines and proper provisions regarding handling cases on moneylending and when it becomes a crime.
Is Moneylending in Singapore a Crime?
Moneylending is not a crime in Singapore. The Ministry of Laws brought about legislation concentrating on the industry.
It’s called the Moneylenders Act 2008. It was based on research and studies on the moneylending industry. Today, the Moneylenders Act has undergone various amendments and restrictions to ensure that licensed moneylenders and borrowers in the country have equal protection against overborrowing, illegal practices, and another breach of contracts.
The Moneylenders Act encompasses the people or entities authorised to operate moneylending businesses. For instance, here are “excluded moneylenders”, “exempt moneylenders”, and licensed moneylenders. All of these individuals or groups have to go through different methods of verifications to acquire their designated specifications.
Moneylending in Singapore is more than legal if you’d say. Nonetheless, regardless of its legitimacy, crimes arise behind the financing industry.
What is Moneylending in Singapore?
Moneylending is a specific practice that is integral to business and financing. In this market, the moneylenders offer their services by providing services, goods, and especially money to their clients. Moneylending in Singapore businesses grant these financial services to the country’s diverse communities and businesses.
Banks and financial institutions may have some similarities with moneylenders, but these entities do not belong to the same group of moneylenders.
For one, Moneylending in Singapore is under the Ministry of Law’s regulations. In contrast, other financing businesses are under the Monetary Authority of Singapore’s laws and regulations.
Moneylending in Singapore Types of Loans
Singapore’s moneylending industry specialises in administering and granting diverse loans to its clients. There are two specific loan branches that borrowers must be aware of. Borrowers must know whether they need to present collateral before loan application.
In this manner, they’ll be prepared to fully oblige to the debt requirements imposed by being legally allowed to lend money in the country. These particular types of branches are unsecured and secured loans.
Unsecured Loans
Unsecured loans are called such because the borrowers are not demanded to surrender any assets to as loan’s guarantee. Another term for this debt type is the personal loan. Personal loan branches are in diverse debt types suitable for each borrower’s specific monetary needs.
Any borrower needing financial assistance may approach moneylenders in Singapore and apply for a personal loan. Without offering any properties, investments, vehicles, or assets as collateral, such loans from a licensed moneylender are accessible to all communities in the country.
Secured Loans
On the other hand, secured loans require collateral before the application proceeds and attain loan granting.
Secured loans may release more significant cash. As a result, financial institutions and moneylenders must guarantee that their business will not suffer if the debtor fails to comply with the loan agreement or contract.
Be sure only to apply for secured loans from registered lenders in the country. Aside from the loan classifications, here are the types of loans borrowers could send an application for:
Types of Loans from Singapore’s Moneylending Industry
A borrower in need of financial assistance may apply for these specific loan types for notable and legit lenders in the industry:
- Personal Loans
- Business Loans
- Bridging Loans
- Payday Loans
Most of these loans are unsecured. It’s to help borrowers acquire the financial assistance they require without worrying about the highly stringent procedure. Furthermore, as these are unsecured loans, borrowers may obtain cash even with no collateral.
Which businesses can borrowers apply for moneylending in Singapore loan types?
Moneylenders for Moneylending in Singapore
Moneylending in Singapore has its specific lending business financial assistance providers. These are individuals or groups with establishments focusing their operations on lending money to their clients. They are the moneylenders in Singapore.
Singapore’s tightly regulated moneylending industry guarantees borrowers the highest protection from predatory and unethical lending practices. Thus, Singapore’s community should only have loan transactions from these specific moneylenders.
Here are moneylending in Singapore’s moneylenders:
Excluded Moneylenders
These moneylenders in Singapore have been authorised to lend money per the Moneylenders Act in Singapore. Most often, these are businesses that grant loan opportunities to their employees. These are considered part of the employment benefits.
Excluded moneylenders may provide loans without a licence. However, such services are subject to specific regulations and conditions. These particularly involve:
- Limitations on interest rates
- Transparency in lending practices
- Dispute resolutions and mechanisms
- Committed compliance with the Moneylenders Act
Exempt Moneylenders
Moneylending in Singapore is stringent with its laws. Certain businesses may apply for exemptions to become exempt moneylenders in Singapore. They may grant loans’ without licences but must acquire legal accreditation via the Ministry of Law.
Exempt moneylenders are still subject to Moneylenders Act conditions and regulations, particularly on the:
- Interest rates limitations
- Dispute resolution mechanisms
- Lending practices’ transparency
- Responsible compliance with the Moneylenders Act
Licensed Moneylenders
Licensed moneylenders in Singapore are the primary loan providers in the moneylending industry. The application to become a licensed moneylender is easy yet complicated, considering everyone must fulfil the criteria such as passing language exams and other necessary evaluations.
To establish a lending business, licensed moneylenders should first fulfil all requirements for their company before being able to operate. All registered lenders in Singapore are subject to precise regulations and conditions, such as:
- Only impose a 1% to 4% maximum monthly loan interest rate.
- Up to 10% administrative fee of the loan amount
- The late interest rate chargeable is capped at 4% per month
- Late charges may apply for a $60 maximum
Remember that concerns with lending transactions result from criminal cases due to illegal or unlicensed moneylenders.
Unlicensed Moneylenders’ Connection to Moneylending Crimes
Illegal or unlicensed moneylenders in Singapore are infamous. Malaysians and Singaporeans frequently call them Ah Longs.
They are scandalous with their operations and usually act like loan sharks. These are the type of people or groups that are eager to exploit every individual they find vulnerable in Singapore.
It doesn’t matter if their target is a Singaporean citizen, permanent resident, or a foreigner with a work pass. So long as they see an opportunity to manipulate, scam, and harass their victims, they will.
Ah Longs have particular targets, which are often the borrowers in difficult financial situations. Due to the lack of funds, the victims usually have low incomes, thus being financially vulnerable.
Moneylending in Singapore Evolves into Criminality
Moneylending in Singapore becomes a crime when illegal activities are enforced in particular situations. For instance, the modus operandi of unlicensed moneylenders are numerous, which often result in breaching the Moneylenders Act 2008, such as;
Breaching Moneylending in Singapore Advertising Restrictions
It is illegal for any moneylender in Singapore to reach out to prospective borrowers through SMS, other social media platforms, and even newspapers.
They entice their victims to borrow money under false and misleading statements. They do this by promising the borrower a faster, bigger loan in exchange for a meagre interest rate than financial institutions or the required 4% monthly interest rate regulation by the Moneylenders Act 2008.
These individuals are aggressive in searching for new victims through WhatsApp. They will invite low-income workers or foreigners to take a loan even when the victim doesn’t contact them.
All of these advertising approaches are illegal.
Demanding Upfront Payments
When a person wishes to borrow money from banks, and financial institutions, the transaction often takes a lot of time. These businesses meticulously filter their borrowers’ credit history, records, proof of income, and other documents.
Licensed moneylenders in Singapore do provide a speedier process. Nonetheless, all documents must be prepared. The client must visit the moneylending office in person because the borrowers who want to get a loan must sign the necessary papers and wait for the loan procedure to be completed in person. It complies with the Moneylenders Act legislation.
So, when the supposed moneylender asks for upfront payments to activate the loan or speed up the process, it’s already a red flag.
There’s a high probability that an unlicensed moneylender is pursuing their criminal tactics. It usually occurs when these individuals exaggerate their promotional methods and promises to provide an easy and hassle-free loan process. The catch is, there’s a price to pay, literally.
When the victim sends the payment, these Ah Longs will pretend they didn’t receive any money and ask again. Or they would disappear almost immediately.
Moneylenders in Singapore are not allowed to ask their borrowers for upfront processing fees, regardless of the amount.
Obsessed with Obtaining Borrowers Critical Data and Information
In Singapore, the Personal Data Protection Act 2012 or PDPA, exists. It is the data archive set up by the government that businesses can use to acquire an individual’s data for rightful usage. Furthermore, it is the law that individuals may use to safeguard their data, which also includes rights to access and correction, and to utilise and disclose the data for authorised and reasonable purposes.
Moneylending in Singapore becomes a crime when Ah Longs or any individual breaches the PDPA. Illegal money lending activities that commonly involve this scenario are when unlicensed moneylenders are hoarding their victim’s data, such as asking for;
- SingPass user ID with its password
- Photos of cards and other essential documents that may either be a passport, driver’s licence, employment pass, work permit, ATM card, etc
- Information on employers, colleagues, friends, and family members
Reporting Illegal Moneylending in Singapore Activities
Although the Ministry of Law and the Singapore Police Force have caught many unlicensed moneylenders in the country, more continue to wreak havoc on many innocent citizens.
Singapore’s moneylending is legal. It only becomes a crime when illegal activities are linked to the moneylending industry.
To counter and report illegal moneylending activities in Singapore, the best option is to call the Registry of Moneylenders at 1800-2255-529. Another option is to contact the Singapore Police Force at ‘999’ or through the X-Ah Long hotline at 1800-924-5664.
Avoid Crime Entanglement with Moneylending in Singapore
Moneylending in Singapore is legitimate. Thus, if you desperately need monetary assistance, these registered businesses can help you. Nevertheless, you must reach out to a licensed moneylender before applying for a loan.
It’s essential to do so for you to understand the diverse loan choices and comply with the criteria and requirements. Know that any lender who goes astray and breaches the Moneylenders Act you have the right to file a report against them.
The industry of moneylending has all the lending and loan advantages you need. You must be especially cautious and conscious to avoid lending crime entanglement. Once you practice and follow through with the regulations, you can borrow money from the lending business in Singapore without hassles.
Ensure your loan transaction isn’t involved in any criminal-related activity, and be wise when choosing a moneylending business in Singapore. To apply for a loan from a legitimate moneylending business in Singapore that complies with the Moneylenders Act, click here now!
