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New rules for money lenders

hokkien

Alfrescian (Inf)
Asset
SINGAPORE: New regulations to cap the cost of borrowing from licensed money lenders will kick in on Thursday (Oct 1), announced the Ministry of Law (MinLaw). The new regulations will also require money lenders to calculate interest on a reducing balance basis.

In a news release on Wednesday loans will be subject to the following caps:

An upfront administrative fee of not more than 10 per cent of the loan principal
Interest of not more than 4 per cent per month
Late interest of not more than 4 per cent per month
Late fee of not more than S$60 per month
Total borrowing cost of not more than 100 per cent of the loan principal
The caps will not apply to loans granted to businesses which have not been registered for at least two years before the grant of the loan. They will also not apply to loans granted before Thursday.

Currently, an individual earning less than S$20,000 annually can only borrow a maximum of S$3,000 in unsecured loans.According to MinLaw, the new regulations are aimed at protecting borrowers who may have no alternative but to go to licensed moneylenders.

The changes come after the Government accepted 12 out of 15 recommendations made by the Advisory Committee on Moneylending in May this year. MinLaw says that the three remaining recommendations will be reviewed later on.

Speaking to Channel NewsAsia, the Moneylender's Association of Singapore says the new rules have caused apprehension among members. However, the association has issued a circular to members urging members to abide by the new requirements.
 

Narong Wongwan

Alfrescian (Inf)
Asset
All BS wayang.....
Interests 4% per month? Lol Leegalised ah longs eat western north wind?
There are 101 ways to bypass these dumb rules....only look good on paperwork.
 

GoldenDragon

Alfrescian (Inf)
Asset
All BS wayang.....
Interests 4% per month? Lol Leegalised ah longs eat western north wind?
There are 101 ways to bypass these dumb rules....only look good on paperwork.

The key question to ask is, why the new drastic changes? Only one answer - whoever drafted the rules n regulations earlier messed up big time. These people know nothing abt the industry. New rules many loopholes too.
 

GoldenDragon

Alfrescian (Inf)
Asset
The people who have to be clients of moneylenders dont qualify for bank loans. They now pay 48% per annum. Does this make sense?

The govt should step in. Eliminate all these licensed ah longs n offer super low interest to these people. Lower than banks. Now, that would make sense.
 

Cerebral

Alfrescian (InfP) [Comp]
Generous Asset
Aiyah. Never pay Ah Long for 1 round of interest and he resets the entire loan. This one how? The rules never mention how to control this
 

Cerebral

Alfrescian (InfP) [Comp]
Generous Asset
The people who have to be clients of moneylenders dont qualify for bank loans. They now pay 48% per annum. Does this make sense?

The govt should step in. Eliminate all these licensed ah longs n offer super low interest to these people. Lower than banks. Now, that would make sense.

Cannot lar. These are high risk people leh. Without Ah Long, all default sia
 

NoOnEsAwMe

Alfrescian
Loyal
quote:
"An upfront administrative fee of not more than 10 per cent of the loan principal
Interest of not more than 4 per cent per month
Late interest of not more than 4 per cent per month
Late fee of not more than S$60 per month
Total borrowing cost of not more than 100 per cent of the loan principal
The caps will not apply to loans granted to businesses which have not been registered for at least two years before the grant of the loan. They will also not apply to loans granted before Thursday."

so if X borrows $1,000
admin fee $100
interest of 4%/mth, compounded to 1 year means 60.01% p.a. interest?
so, ($1,100+$100) x 160% = $1,761
(still more lucrative than a bank's credit card rate, 2% p.m., 27%+ p.a.)

total borrowing cost max. $1,000
a) over how long a period? 1 year? per year (i.e. $2k for 2 years and $3k for 3 years? etc?)
b) interest applicable on Late Fees and Late Interest? (i.e. like what the banks are doing?)

and

why the focus on limiting the loans of the moneylenders?
wiling lender, willing borrower right?

the crux of the issue is the repayment, no?

why only focus on the moneylenders?
what about the people who collect the debts for them?
what about recalcitrant borrowers who refuse to pay?
what are the consequences for each of these groups?

next step - they should implement a Fair Debt Collection Practices Act (FDCPA) or equivalent.
this will reduce the muscle aspect of this line and make collection and repayment more efficient.
borrowers should be aware of impact on their credit rating in future should they refuse to do their part to repay promptly etc.

however, do they have the gumption to reduce the rice-bowl of the less-educated muscle-for-hire?
e.g. how many debt-collectors actually know how to calculate interest rates (e.g. reducing-balance, etc)?
and do we need that many "debt-collectors" running around physically to serve papers?

issue is not so simple imo.
 

NoOnEsAwMe

Alfrescian
Loyal
in a way i agree with GD, but this group of people also have to be aware of the possible consequences of debt-default, should they turn to the moneylenders.

i think govt does not want to get involved directly partly because it is a social dilemma.

govt supposed to help people - what if the people borrow from govt entity and die die dont repay?

the question will still come back to - what are the consequences of actions.

however, i think we as a society should move away from the thuggery/muscle style of debt-collection. i really detest the nuisance they make of themselves in carrying out their "job". got no other job out there to do, must do this kind of job, and do it this way?
 

johnny333

Alfrescian (Inf)
Asset
Why are people so desperate that they have to borrow from an Ah Long:confused:

It is of course due to the PAP policies. For donkey years the PAP has kept wages in Spore low while they have allowed prices to sky rocket making Spore one of the most expensive places to live.

Then they allowed the state sponsored casinos to operate in Spore. Now they want to make more rules & regulations to control the mess that they are responsible for:rolleyes:
 

frenchbriefs

Alfrescian (Inf)
Asset
the biggest problem is the cost of living in singapore is retardedly high,but the government wants to keep it that way because they want to maximise profits and keep gdp high.but they do not want to do anything about wages.instead spending taxpayers money on some retarded progressive wage instead of making companies pay what they are supposed to.fucking moronic PAP.

in developing countries,even though wages are low at least the cost of living is extremely low at least the lower income classes have breathing room.in thailand things are so cheap it borders on ridiculous,u can get a bowl of noodles for 20 baht less than $1,u can enjoy fine dining at a shopping center for 59 baht or less than $3,u can even stay at a hotel for a month for less than $400.in singapore for $400 u are lucky if u get a broom closet sharing with 3 other pinoys.
 

alvin36

Alfrescian
Loyal
This is shocking !!!

Before today, they charge 20-25% monthly without administration fees

But guess what now ??

They charge no more than 4% monthly. That is 1% per week.....

BUT....the loan period is only for 1 week !!

This is how is work... if you borrow 1k, after deduct administration fees, you get 900.
But next week, you need to pay 1000+1%=$1010

Shocking !!
This work out to be 11% per week !!!
 

Narong Wongwan

Alfrescian (Inf)
Asset
This is shocking !!!

Before today, they charge 20-25% monthly without administration fees

But guess what now ??

They charge no more than 4% monthly. That is 1% per week.....

BUT....the loan period is only for 1 week !!

This is how is work... if you borrow 1k, after deduct administration fees, you get 900.
But next week, you need to pay 1000+1%=$1010

Shocking !!
This work out to be 11% per week !!!

There are those that charge 50% per month even.....
Borrow $1000 then per week $375 installment.....effectively it's more than 50%
But that's not all....late or missed paying the installment.....that's when the late fees, default fees starts to pile up.....and those poor chaps borrowers stuck in a trap they can't get out of. Some still paying for that initial $1k loan one year on.....
 

alvin36

Alfrescian
Loyal
This is shocking !!!

Before today, they charge 20-25% monthly without administration fees

But guess what now ??

They charge no more than 4% monthly. That is 1% per week.....

BUT....the loan period is only for 1 week !!

This is how is work... if you borrow 1k, after deduct administration fees, you get 900.
But next week, you need to pay 1000+1%=$1010

Shocking !!
This work out to be 11% per week !!!

what law is this ?
so easy to go through loop hole ?
all the scholars think of such stupid law ??
and ah long can simple counter it ?

first world country ....
 

GoldenDragon

Alfrescian (Inf)
Asset
The visible cock-ups are peanuts compared to those you dont see n dont hear. By relaxing the interest rate from 18% per annum to bo limit as long as borrower n lender agree, many ah longs became licensed money lenders. From 100 plus operators it shot up to almost 400 till they stop granting new ones.

So, what are the no see no hear things? Well, the illegal turned legal ah longs all songsong to Jurong. They exchanged and some sold their combined databases to ah longs based overseas aka jip thuan. Prior to the change in interest rate and proliferation of licensed moneylenders, very few jip thuans.

The changes led to many jip thuans having in their possession details of past n current debtors. Debtors being debtors, as long as can get loans, why not? They needed loans to repay loans. Sure die super fast.

Jip thuans usually fuckers with their MO. You can never repay your loan. Chut many patterns.
2-3 bros from this forum PMed me in the past for advice. Mine always the same - if steady jop thuan, pay off then change hph n bank acct no. If jip thuan chut pattern, same. Change hph n bank acct but stop paying.
 

frenchbriefs

Alfrescian (Inf)
Asset
This is shocking !!!

Before today, they charge 20-25% monthly without administration fees

But guess what now ??

They charge no more than 4% monthly. That is 1% per week.....

BUT....the loan period is only for 1 week !!

This is how is work... if you borrow 1k, after deduct administration fees, you get 900.
But next week, you need to pay 1000+1%=$1010

Shocking !!
This work out to be 11% per week !!!

doesnt matter,the new law say late interest of no more than 4 percent per month and late fees of no more than $60 per month.u can simply delay payment for like say 3 months and over time it should be cheaper and lower interest to take out that loan.borrow one week is boh hua because of the small
capital loan and the high upfront admin fee.
 
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