In 2018, the Ministry of Law in Singapore enacted the Moneylenders Amendment Act’s preliminary provisions.
This bolstered the regulation of licensed money lenders and gave better protection to borrowers.
Thanks to the moneylending system reforms, borrowers now have more secure access to personal credit.
The regulations imposed maximum total loan amounts that a borrower can get from licensed money lenders.
They also include a self-exclusion framework to help borrowers control their borrowing habits.
When a borrower applies for self-exclusion, it legally bars money lenders from providing him or her with any loan.
Let’s look at how to ban someone from a money lender – even yourself.
When To Ban Your Loved Ones From Taking A Loan
This would be a wise move if:
They Can’t Make The Required Payments
It should go without saying that it’s not a good idea to encourage a loved one to borrow money if he or she obviously can’t afford to pay it back.
You Find Yourself In The Position Of A Guarantor
If you’d rather not lend money to a friend or family member, you could offer to co-sign a personal loan for them.
You can even let them use your credit card when they need it. You won’t have to worry about forking over any hard cash.
However, your credit score may take a hit if you co-sign a loan.
This is because the loan’s inquiry, payment history, and outstanding balance, will appear on your credit report.
In addition, you are fully responsible for any charges made on your account by unauthorised users of your credit card.
Documents Required To Ban Someone From Taking A Loan
The Moneylender’s Association of Singapore (MLAS) allows the public to submit applications to money lenders that request that they deny loans requested by friends and family.
Members of the public can make these requests through the MLAS website and verify their identity by mailing or emailing the documents.
The MLAS requests $50 to process each request. If you decide to send this request, you can send a cheque as payment.
Here are the documents you’ll need:
- A cover letter with your full name and contact information explaining why you want the person to be in the Do Not Lend Directory
- Photocopies of the front and back of your NRIC
- Verification of kinship with the subject (e.g. birth certificates in the case of parents and children, and marriage certificates for spouses)
- A signed and crossed $50 cheque made payable to the “Moneylender’s Association of Singapore”
What The MLCB Self-Exclusion Listing Is About And Who Can Apply
Perhaps you don’t need to know how to ban someone from a money lender – because you are the one who needs to be banned from taking a loan.
Did you know you can apply for permanent self-exclusion from getting any unsecured personal loan?
That includes debt consolidation loans from licensed money lenders. You just need to use the Self-Exclusion Listing.
So who can register for a self-exclusion listing?
Anyone can file self-exclusion orders, including foreigners living in Singapore.
How To Register For A Self-Exclusion Listing
You can submit a self-exclusion request to the Moneylenders Credit Bureau (MLCB) website using your Singpass.
If you do not have Singpass, but know someone who does, you can have that person register with the MLCB on your behalf.
If you’re authorising someone to submit something online, ensure they have necessary documents to upload.
- You must submit a signed Self-Exclusion Listing registration or withdrawal authorisation form
- Proof of who you are as the excluded individual
In the case of third-party registrations, the exclusion will not take effect until the MLCB has verified the supporting documentation.
It will also notify you and the authorised person via email about the status of the registration.
Effective Period Of Self-Exclusion
Anyone who has previously registered for the Self-Exclusion Listing and whose exclusion time has elapsed can remove his or her name from the list.
At the time of registration, Singaporean citizens and permanent residents can select a minimum exclusion period of either one or two years.
The minimum exclusion time for non-citizens is two years.
Costs Of The Self-Exclusion Listing
Singpass holders must pay $3 to add or remove their information from the Self-Exclusion Listing.
Foreigners without a valid Singpass will pay $5 for an authorised representative to register or withdraw on their behalf.
Both costs include GST.
How To Verify If You Have Been Excluded
You can buy a copy of your MLCB report, which includes details on your Self-Exclusion Listing and the time you are to remain on it, from the credit reporting agency.
Can Someone Exclude You Without Your Permission?
No, self-exclusion has to be a deliberate choice.
Individuals should only voluntarily request self-exclusion.
Third parties can help you apply, but you’ll still need to sign an authorisation form. It should state that you’re okay with being self-excluded and understand what it means.
The application will be void if the MLCB finds that the self-exclusion application was made without your permission.
How MLAS Offers Protection From Loans
What does the Singapore Moneylenders Act mean for borrowers like you?
- The Option Of Borrowing From Legitimate Money Lenders
The Moneylenders Act in Singapore ensures that only licensed money lenders that adhere to strict government guidelines can extend credit to borrowers.
Indeed, a licensed money lender is a secure and legal option if a bank refuses to offer you a loan.
The Act protects borrowers against predatory and intimidating illegal lenders such as loan sharks.
- You Can Check If You Are Dealing With A Licensed Money Lender
There is a list of licensed money lenders maintained and updated by the Ministry of Law.
This list, which can be found online, gives borrowers more peace of mind before signing a loan agreement because they can quickly check to see blacklisted money lenders in Singapore.
Regardless of whether a money lender has a license, exercise caution if it:
- Makes threats or uses abusive language towards you
- Requests for your Singpass password or user ID
- Retains your ID or any other personal identification documents
- Tries to get you to sign a loan agreement that is blank or missing critical information
- Gives you money without also handing over the loan’s note of contract
- Lacks clarity regarding all applicable terms and conditions
- Lends you money without verifying your income using documents such as your payslips and tax returns, and without meeting you in person
- Withholds a portion of the principal loan amount for no reason
- There Is A Cap On How Much Debt You Can Take On
The Moneylenders Act in Singapore helps citizens in handling their debts.
The Act sets down maximum loan amounts that a borrower can get from licensed money lenders.
All Singapore money lenders use your annual salary as the basis for your borrowing limits.
Money lenders can impose a cap on the interest and fees.
It is against the law for licensed money lenders to overcharge their clients with excessive fees and interest rates.
This offers a safety net to borrowers who could otherwise be vulnerable to unfair or predatory practices.
Here is what licensed money lenders can charge their clients:
- Up to 4% per month on the unpaid balance of your loan
- In case of late payment, there is a late interest charge of up to 4% per month on the amount that is due
- A maximum penalty of $60 for late payment
- 10% service charge of the principal
Remember that the sum of these expenses your money lender charges cannot exceed the amount you borrowed.
As an illustration, if your loan is $1,000, the interest total cannot be more than $1,000.
If a money lender wins a case to get its loan back, it can get its legal fees back.
The Singapore government prohibits money lenders from charging any interest, fees, or other costs above.
You can get help if a licensed money lender in Singapore has overcharged you or engaged in any other illegal or unfair practices.
- Regulated Advertising
The Singapore government restricts money lenders’ advertising options under the Moneylenders Act.
Specifically, the limits of their advertising options are:
- Directories, both business and consumer, printed and online
- Their own websites
- Banners outside their storefronts
That’s why it’s best to avoid getting a loan that was advertised on a leaflet, text message, email, or via a cold call from someone who claims to be a money lender.
Stay Safe By Only Borrowing From Licensed Money Lenders
As you can see, the Moneylenders Act of Singapore ensures your safety when dealing with lenders.
For your own protection, you should only go to a licensed money lender if you require a loan.
The government has put in place stringent legal protections for borrowers like you.
Credit 21 is among Singapore’s top licensed money lenders to turn to if you’re in a tough spot and need quick cash.
We offer personal loans with easy-to-understand terms based on your income level and repayment capacity.