In the face of the amendments to the moneylenders rules in Singapore, SgMoneyLoans reiterates its commitment: To help people on tight financial situations get fast cash by assisting them in finding the best loan rates across the island-country.
SGMoneyLoans of Singapore announces that the Ministry of Law has made amendments to the Singapore moneylenders rules on personal loan in Singapore to further the protection of its borrowers. It is putting more emphasis on the people in the lower income group. The amendments become effective on June 01, 2012.
Here's a summary of the four main areas which are affected by the amendments:
1. Mandate the use of Effective Interest Rate
Effective June 1, 2012, all licensed Singapore moneylenders are directed to use the Effective Interest Rate (EIR) instead of the Nominal Interest Rate (NIR) on each loan in Singapore .
The previous cap of 12 percent NIR will be replaced by its equivalent in EIR which is rounded up to 13 percent. The 18 percent NIR will also be replaced by its equivalent EIR which is rounded up to 20 percent.
Moneylenders who do not provide EIR to their borrowers will be meted with the following penalties:
1.1 First offense - a fine of up to S$20,000 and/or imprisonment of up to six months.
1.2 Second Offense - a fine of up to S$40,000 and/or imprisonment of up to 12 months.
2. Extend coverage of caps on interest rate, to a larger group of borrowers.
Effective June 1, 2012, the coverage of the interest rate caps mentioned in item 1 above will include borrowers who are earning less than S$30,000. Previously, only loan applicants who are earning less than S$20,000 a year are qualified. Moneylenders are also directed to charge borrowers earning less than S$30,000 a year with an effective interest rate of 13 percent for secured loans and 20 percent for unsecured loans.
3. Remove certain fees from list of fees which moneylenders are allowed to charge borrowers.
Effective June 1, 2012, three fees will be removed from the list of permitted fees on every personal loan in Singapore . These are: i)fees for the acceptance of loan application, ii) fees for the acceptance or renewal of a revolving credit loan, and iii) any payment not made through electronic fund transfer.
The remaining six fees which are conditional are still permitted.
4. Abolish all exceptions to the limits on the amount of unsecured loan that a borrower can obtain.
Effective June 1, 2012, all exceptions to the caps on the amount of unsecured loans are abolished.
The amendments directed all moneylenders to comply with the new Moneylender Rules. It further warns that the Registry of Moneylenders will take stern action should any moneylender fail to comply with the new rules.
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