Over the years, there has been several laws that were created to protect borrowers in Singapore. In an effort to tighten up the moneylending industry, it is now mandatory that moneylenders will need to seek for approval from the Registrar of Moneylenders before hiring any employee, in addition, it is required that all licensed moneylenders be incorporated as companies and to submit annual audited accounts. These changes seek to ensure that borrowers will have safe access to personal credit.
Now, licensed moneylenders must obtain a borrower’s credit report from the moneylenders’ credit bureau before granting any loan.
Consequently, from November 2018 onwards, borrowers now face a total loan cap; with lower income foreign workers facing a lower borrowing limit. As mentioned in Straits Times: “The first phase of the Moneylenders (Amendment) Act 2018 and Moneylenders (Amendment) Rules 2018 will kick in at the end of this month (November 2018) to provide better protection for borrowers, said the Ministry of Law (MinLaw) yesterday.”
- With these caps in place, now Singaporean and permanent residents that have an annual income of less than $20,000 can only borrow up to $3000.
- While those who have an annual income of more than $20,000 a year can borrow up to six times their monthly income.
- For foreigners who have an annual income of less than $10,000, they now have a lower aggregate cap of $1,500.
- While foreigners who have an annual income of $10,000 to $20,000 can borrow up to $3,000.
- Lastly for this group, those who have an annual income of $20,000 and above can borrow up to six times their monthly income.
