Debt is a common problem, and if you’ve ever had to deal with it, you know how challenging it can be to repay it. It could be because you experienced a life-altering event such as losing your job, or overspent during a bad month.
Borrowing money can become a problem if you rely too heavily on it. The speed and convenience of loans from licensed money lenders shouldn’t make you any less responsible with how much you borrow.
Suppose you borrowed money and are unable to pay money lender Singapore. What are the likely consequences? Is there anything you can do to improve things?
There are a few potential outcomes if you are unable to money lender Singapore. Here are some consequences:
Your loan history is recorded in a moneylender report from the Moneylenders Credit Bureau (MLCB). The MLCB report details your available credit, current debt, and payment history with all other legitimate lenders.
As this report is accessible by all licensed money lenders, you could be denied a loan in future if you have a history of not repaying loans or have outstanding debts.
A licensed money lender can file suit against you if you fail to repay the remaining balance on your loan. This could come in the form of a letter from an attorney demanding payment or a formal debt lawsuit.
Secured loans such as mortgages, auto financing, and commercial loans require you to pledge an asset, which require some form of collateral.
If you borrow money from a money lender in Singapore and cannot make the payments, you may lose the collateral you provided.
Lenders have a legal right to seize collateral in the event of default.
The law clearly defines the legal authority of legal money lenders in Singapore. It involves protecting the borrower’s privacy and reputation.
Here is what the law allows them to do:
The law makes it illegal to intentionally scare, anger, or humiliate another person through the use of threats, abuse, or insults. Intimidation is a criminal offense if the offender threatens bodily harm or damage to property.
The offender faces up to 10 years in jail, a fine, and caning for causing severe injuries such as fractures, dislocations, or disfigurement.
Taking these measures to make a borrower uncomfortable could be considered mischief and result in a fine of up to $1,000.
It’s also against the law for a creditor or debt collector to cause damage your home in the course of collecting a debt.
Contact your lender if you are having trouble making your loan payments.
Make an offer to renegotiate the repayment terms. If you opt to extend the loan, the lower monthly payments will make it easier to manage your finances. You can then have an easier job on how to settle licensed money lender debt. But you may be charged extra fees.
Also, this will extend the time you are in debt, which could compromise your other financial commitments.
To learn how to manage your debt better, you can opt for debt counselling. Such a social service provides you with the information, motivation, and strategies you need to conquer debt.
It will also help you accept your debt status and provide you with the resources and tools to help you repay your debts.
You can reach out to various debt counselling organisations for help.
You can declare bankruptcy if you have more than $15,000 in unrepayable loans. Once you do so, money lenders cannot sue you in court and charge you any more interest. It freezes your debt and stops it from adding up.
The Debt Repayment Scheme (DRS) is another option that may be available to you. The High Court will appoint an Official Assignee to manage your debts and negotiate a repayment plan with your creditors.
Note: When you declare bankruptcy, you will not be able to leave Singapore. As a result, you should only resort to this option if you’ve exhausted all other possibilities.
Unfortunately, the Registry of Moneylenders cannot intervene in your discussions as this is a private contract between you and your money lender.
You may consider approaching a social service agency to help you recover from your debt problems. In some instances, the agencies may help you negotiate a debt repayment plan.
Credit Counselling Singapore (CCS) can help you if you’re having trouble repaying a loan from a Singapore money lender.
CCS’s previous focus was assisting those who owed money to financial institutions like banks and credit card companies. Those who have had trouble making payments to banks and other legitimate lenders can now get assistance through this system.
You must attend a presentation first before scheduling an appointment with a counsellor.
If CCS determines that you are eligible for its programme, it will offer you a payment plan with a fixed interest rate and a term length of five to 10 years.
You can determine your optimal time frame depending on your income and expenses.
The government-run Debt Repayment Scheme (DRS) allows borrowers to consolidate their unsecured debts into a single payment.
But the total of your debts, secured and unsecured, must not exceed $150,000.
The DRS also protects you from being sued without a court order by legitimate money lenders who provided you with an unsecured loan.
Under the DRS, you can repay your debts over a fixed period of time of not more than five years.
When you have repaid your financial obligations under the DRS, you will be free from debt and get a fresh start.
If you find yourself in need of a quick loan but are unable to repay money lender Singapore, you now know what to do.
You should have some awareness of the rules that govern moneylending. Don’t hesitate to contact the appropriate parties if you’re in a financial bind.
Katong Credit is the place to go if you need any further assistance.
We are a reputable licensed money lender in Singapore, offering some of the most affordable interest rates and no hidden fees.