Your family members may face financial issues from time to time. This may force them to seek loans from money lenders.
If your family member keeps getting loans that he or she has no way of paying back, knowing how to ban someone from money lender may be a good start.
Most licensed money lenders use the reports generated by the Moneylenders Credit Bureau (MLCB) to gauge if they should grant loans to borrowers. However, some may not, and this may encourage irresponsible borrowing.
In such an instance, you are doing the right thing by banning your family member from getting a loan from a money lender.
This article will help you learn how to ban someone from money lender to help your loved one get out of a cycle of debt.
The Moneylender’s Association of Singapore (MLAS) was established in 2005 to advocate and protect its members’ rights in the moneylending industry.
To protect individuals from illegal lending, it stipulates that all licensed money lenders must register with it since the MLAS works closely with the Registry of Moneylenders. This ensures that all licensed money lenders operate within a strict set of rules and do not take advantage of their clients.
The MLAS aims to ensure that both borrowers and lenders benefit from the established laws that regulate the moneylending industry.
MLAS members enjoy different advantages such as updated software and hardware, and information on upcoming meetings hosted by the association and its partners.
The MLAS has also set various objectives in order to achieve its goals of protecting borrowers and lenders. These include:
The MLAS also offers several benefits to its members.
For example, it conducts seminars yearly to train registered money lenders on up-to-date technology and the latest products. Members also receive insurance discounts.
If you are wondering how to ban someone from money lender, the MLAS has a Do Not Lend (DNL) Directory.
This is a feature on MLAS’s official website that allows members of the public to make an application to ban their loved ones from money lenders in Singapore.
All the applicant has to do is request that lenders turn down any loan application made by their relatives or loved ones. This will prevent the person from getting further mired in debts from legal and blacklisted money lenders in Singapore.
But note that the directory only acts as a point of reference for MLAS members when giving out loans.
As such, some money lenders may still grant individuals a loan even if they are in the DNL registry. However, the MLAS urges its members not to allow those listed to take out loans.
Also, the DNL Directory is accessible to MLAS members only. Therefore, any licensed money lenders that are not registered with MLAS cannot access it.
Licensed money lenders are regulated by the Ministry of Law. They are allowed to run a moneylending business where they follow the rules established by the Moneylenders Act.
Such rules apply to their interest rates, the amount they can lend, and chargeable fees. The Registry of Moneylenders will suspend or blacklist money lenders that do not follow these rules.
All legal lenders operate under the laws stipulated in the Moneylenders Act, so they will avoid any bad practices. They may seek the services of debt collection agencies to recover their money.
These agencies follow appropriate codes of conduct that bar them from mistreating borrowers.
However, illegal lenders are not bound by such rules and may use abusive language and harassment.
In fact, blacklisted money lenders in Singapore often charge high rates and harass people when they want repayment. In such cases, report it to the relevant authorities.
Blacklisted lenders are deviant licensed money lenders that broke the rules in the Moneylenders Act. After this, they were suspended and blacklisted on the Registry of Moneylenders.
So make sure you are dealing with a licensed lender when getting a loan.
In Singapore, unlicensed money lenders or loan sharks have been known to pretend to be licensed money leaders to dupe unsuspecting borrowers.
You can tell if a money lender is licensed from the way it runs its business. For instance, licensed money lenders meet borrowers in person at their physical offices, advertise only on their official websites, office premises, and in print or online directories.
It should never make or send unsolicited phone calls and text messages. Check the Ministry of Law’s list of licensed money lenders in Singapore.
Licensed money lenders will be found on this list, while those who break the law will be blacklisted. So if you don’t find your lender on the list of licensed money lenders, it could be a blacklisted lender.
Although loans can be useful, they could lead to problems that may force you to ban your loved ones from applying for more loans.
Fortunately, the MLAS’s DNL Directory enables you to send a request to money lenders to turn down loan applications from your loved ones.
Here are some situations that may force you to bar your loved one from securing loans.
The biggest danger that a loan presents is when the applicant is not able to make repayments.
Your loved one may face challenges with repaying the loan due to the high interest rate or other financial issues.
This may force him or her to default on the loan, which damages your credit score and may even lead to legal action from the lender.
To ensure this doesn’t happen, you can ban your loved one from taking more loans through the DNL Directory on MLAS’s website.
If your loved one applies for a personal loan, it could pose a risk to his or her investments. For example, your loved one may get a loan but not achieve what they need in the end.
As a result, he or she may end up struggling with repayment or worse, getting more loans even when there is no means of repaying them. Your loved one may even lose a property in the process.
By taking a loan, your loved one is committing to monthly payments. If he loan amount is too high, it could interfere with the ability to pay other bills.
This may cause your family member to start borrowing again, thus piling up debts. You don’t want your loved one to enter into financial trouble by having too many debts.
If mismanaged, loans pose risks to an individual’s financial security and properties. They may lead to high interest fees, and late payment fees, thus increasing debts. Other situations that may compel you to ban a family member from taking loans include:
Some lenders may be open to negotiation and adjust repayment dates, but may charge more fees.
Note that the Registry of Moneylenders cannot assist someone in negotiating with any lender if the person cannot repay the loan.
But you can try other ways to help your family member, such as through social services, on top of banning him or her from getting loans.
Rules set by the government regulate the moneylending industry. Hence, every licensed money lender must go through some procedures.
This includes checking a borrower’s eligibility and requesting various documents before approving loans.
The Moneylenders Credit Bureau (MLCB) provides a centralised database where a lender can get information about a borrower’s credit history.
This helps a lender determine if a borrower can repay a loan. Likewise, when borrowers access their own moneylender reports, they will know their credit score.
If it is not ideal, they can then endeavour to improve their credit score. It is recommended that you check your credit report every year.
This will help prevent identity theft and detect any mistakes in your report that may affect your credit score.
If you have current loans, lenders will need to obtain information about them from the MLCB before granting you a loan.
You can get your MLCB report anytime you want for $6.42.
But what if the person you want to ban is yourself?
A self-exclusion listing on the MLCB allows individuals to self-register to be prevented from obtaining unsecured loans from licensed money lenders. This listing can be applied by any individual who lives in Singapore.
Foreign workers and foreign domestic helpers can also ask their employers to prevent them from borrowing.
To apply for a self-exclusion listing, take your Singpass and visit the MCLB website. You may authorise another person to apply on your behalf if you do not have Singpass.
However, the person applying on your behalf will be required to have a self-exclusion listing registration form and a withdrawal authorization form that you have signed and filled. An identification document from the person requesting to be barred from loans is also required.
As stipulated in the Moneylenders Act, removal from self-exclusion listing shall be based on its expiry of the period.
When applying for this listing, you are committing to agree not to borrow from the money lender for the stated period or until it is withdrawn.
Singaporeans and permanent residents can choose a minimum of one or two years of exclusion. Foreigners can be excluded from borrowing unsecured loans for a minimum of two years.
The Moneylender Credit Bureau charges for self-exclusion listing registration and withdrawal. You can pay individually, or your employer can pay on your behalf.
While applying for a self-exclusion listing, you will need to pay $1.50 as a registration fee. You will pay the same amount when you want your name from the list.
However, if you authorize another person to apply on your behalf, you’ll need to pay $2.60. Both fees are inclusive of GST.
You will confirm if you have been excluded by purchasing a copy of your MLCB loan information report. This report displays the status of your self-exclusion and the minimum period of exclusion.
There have been several initiatives by Singapore’s moneylending industry to promote good borrowing and lending practices. These have been important for the benefit of members and borrowers.
Before borrowing, evaluate your situation well and have a repayment plan before committing to any debt. Always borrow only what you can repay.
If you need money urgently, you can approach a licensed money lender for speed and convenience.
Katong Credit is one of the most reliable licensed money lenders in Singapore, offering some of the most affordable interest rates and no hidden fees.