Moneymoney.sg would encourage all borrowers to read through these information from IPTO before borrowing.
1) What should I look out for when considering a loan that is being offered to me?
You need to take note of:
• The amount of the loan that you are taking from the moneylender;
• The interest rate that you will be charged;
• The manner in which interest is calculated;
• The schedule of repayment;
• The additional fees and charges and when these apply to you;
• Your monthly take-home pay, and existing and foreseeable financial obligations, eg. debts or other loans, instalment and insurance plans;
• Your ability to repay in full
• Your ability to repay the full loan and interest to be charged, and at the same time, be able to pay all other existing and foreseeable financial obligations on time.
2) What should I bear in mind before I borrow?
• Always ensure that you ask enough information from the moneylender before you commit yourself;
• Know that the contractual interest rate and the effective interest rate are different – the effective rate is what you actually pay, and may be higher than the contractual rate. Ask the moneylender what the effective interest rate is per annum and shop around for the best rates. You can ask moneylenders to show you how to calculate the interest and repayment of principal and interest;
• Make sure you fully understand the terms and conditions of the loan, such as what will happen if you make a payment late or if you are unable to pay;
• Know what the late payment fees or administrative charges are, when they apply and how they will be computed;
• Borrow only what you really need and are able to repay.
3) How much can I borrow?
You can obtain an unsecured loan of:
• Up to $3,000, if your annual income is less than $20,000;
• Up to 2 months’ income, if your annual income is at least $20,000 but less than $30,000; and
• Up to 4 months’ income, if your annual income is at least $30,000 but less than $120,000.
Consider carefully the total amount of debt you have, including what you might already
From Notes to Borrowers When Obtaining Loans from Moneylenders (2011),Retrieved November 11,2011,from www.ipto.gov.sg/
For the complete “Notes to Borrowers when Obtaining Loan“, please click HERE.
