Nobody wants to be in a position where they are unable to pay their money lender in Singapore or anywhere in the world. After all, things pertaining to licensed money lenders’ late payments, such as late interest charges and late fees, can make it that much more difficult for anyone to pay down their debts.
Can money lenders file a case in court? Do legalised money lenders in Singapore offer debt repayment plans? What can happen if I’m unable to repay my money lender in Singapore? What should I do if I’m unable to pay my money lender? These questions will inevitably conjure up in your head if you’re in or nearing that situation.
Find out the answers to your burning questions below.
What happens if you’re unable to pay your money lender?
1. Compound interest and late interest will begin accruing on the owed balances
If you’re unable to pay your money lender, be aware that they can and will charge late interest on the amount that’s repaid late. Any late or missed repayment will accrue late interest that compounds.
The longer you take to repay any balance that’s already due, the more interest you’ll be liable for at the end of the day. Have a read about key things to know before deciding to borrow money, especially if you’re new to the world of loans.
2. Late payment fees will start accruing for every late repayment
Licensed lenders can legally charge a late payment fee of up to S$60 for each month of late repayment. These licensed money lender late payment fees can and will add up if you consistently are unable to pay your money lender in Singapore.
3. Your credit rating will take a hit
When you’re unable to pay your money lender in Singapore, note that all missed and skipped repayments will be recorded in your Loan Information Report at the Moneylenders Credit Bureau.
Your credit rating will inevitably be negatively affected as a result of being unable to pay your money lender. By extension, you probably will find it more difficult to obtain loans in the future.
Like it or not, these records will be visible to other legal lenders if and when you do attempt to get a loan with them. Just so you know, authorised lenders are mandated by law to check on borrowers’ reports when assessing their suitability for a loan.
4. Things money lenders can do to get you to return what you owe
While there are certain prohibited things that money lenders aren’t supposed to do, such as harassing their debtors even in the event that borrowers are unable to pay their money lender, there are many legal things that licensed lenders can do in a bid to get borrowers to make repayments for their loans.
They can:
- Send a letter of demand by post or email
- Visit the borrower’s home or place of employment
- Send debt collectors to collect debt on their behalf
- Take the borrower to court
- Bill the borrower all legal costs ordered by the court after the lender’s gotten a successful claim to recover the loan
- Seize the borrower’s pledged asset or collateral (e.g. car, home) if they’d taken up a secured loan
Can money lenders file a case in court?
Yes, absolutely. Money lenders can file cases in court against borrowers who are delinquent and financially irresponsible about repaying what they owe.
However, knowing full well you genuinely have difficulty making repayments, most money lenders are happy to negotiate with you and draw up a debt repayment plan that aims to help you restructure your debt and better manage it before taking more drastic measures.
Most legal lenders are rather understanding in this regard — they will often employ other less drastic debt recovery methods before resorting to filing a case in court.
What should you do if you’re unable to pay your money lender?
1. Inform your money lender ASAP
This may seem trivial, but your lender will appreciate you informing them of your situation as soon as you possibly can. Be truthful and genuine about it, and apologise earnestly for being unable to pay your money lender right there and then.
2. Ask for reasonable payment extensions, lower interest rates or modifications to your repayment schedule
Your money lender will likely help you out in this regard, so long as your requests are reasonable and you have a clear action plan that you can put into place to repay what you owe.
Not sure where to start? Consider asking your lender if they could let you make smaller instalment payments, reduce your interest rates a little, extend your loan tenure by a number of months, or perhaps shift your monthly repayment date to one that’s right after your payday.
The majority of the authorised lenders will be happy to extend a helping hand if they can sense your sincerity in wanting to make things work. It’s a win-win situation for both sides, really — you get to pay down your debt more comfortably, your lender gets to recoup their money with greater certainty.
3. Reach out to social service organisations
Even though it’s never pleasant to be running away from your debt obligations, sometimes it pays to swallow your pride and seek help from trusted sources for various debt counselling services, as well as tips on avoiding and/or settling money lender disputes.
Apart from offering credit counselling to debtors in need of support, social service agencies can also provide general credit management information and assistance regarding debt repayment plan negotiations with creditors.
Here are the social service agencies you can reach out to:
Adullam Life Counselling
Address: 151 Chin Swee Road #08-04 Manhattan House Singapore 169876
Tel no.: 6659 7844
E-mail: [email protected]
Association of Muslim Professionals (AMP)
Address: 1 Pasir Ris Drive 4 #05-11 Singapore 519457
Tel no.: 6416 3960
E-mail: [email protected]
Arise2Care Community Services
Address: 5 Harper Road #02-01A Singapore 369673
Tel no.: 6909 0628
Email: [email protected]
Blessed Grace Social Services
Address: 18 Arumugam Road #05-01 Antioch@Macpherson Singapore 409962
Tel no.: 8428 6377
Email: [email protected]
Credit Counselling Singapore*
Address: 51 Cuppage Road #07-06 Singapore 229469
Tel no.: 6225 5227
Email: [email protected]
One Hope Centre
Address: 8 New Industrial Road #04-04B LHK 3 Building Singapore 536200
Tel no.: 6547 1011
Email: [email protected]
Silver Lining Community Services
Address: 22 New Industrial Road #07-03/04 Primax Building Singapore 536208
Tel no.: 6749 0400
E-mail: [email protected]
*Take note that Credit Counselling Singapore only deals with cases that include debts with banks in Singapore. If you have both debts from banks and licensed lenders, you may approach Credit Counselling Singapore for help.
4. File for bankruptcy
Any individual or company that’s unable to repay outstanding debt of at least S$15,000 can be declared bankrupt through the legal process. Here are the steps to file for bankruptcy in Singapore.
Bankruptcy is meant to protect the debtor in various ways. Once filed and approved, it prevents your creditors, such as licensed lenders, from suing you for your debts, even though money lenders can technically file cases in court under normal circumstances.
Additionally, the alternative payment plan crafted to suit your existing situation should help encourage more manageable debt repayments.
That being said, filing for bankruptcy should never be done in haste — there are consequences and restrictions you have to contend with. Think of bankruptcy filing as a last resort!
What can you do if you experience licensed money lender harassment?
“What if a money lender keeps threatening me despite pleas to stop?”
Well, you can lodge a complaint against your licensed money lender. It’s one of the most straightforward, legal things you can do to settle licensed money lender harassment issues.
In case you didn’t already know, licensed lenders are not allowed to harass, use threatening tactics or abusive language to get you to pay up.
What happens if you lodge a complaint against a licensed money lender?
The Registry of Moneylenders will look into your complaint thoroughly. To help them move forward in their investigation, you’ll have to furnish them with pertinent details of your interactions with the money lender as well as loan transaction documents. Additionally, you may be required to sit in on an interview with their officers.
Worried about potential harassment from the lender? Fret not, the Registry will never disclose your details to the lender without your consent.
To lodge a complaint against the money lender, simply contact the Registry at 1800-2255-529 or through their online form. Rest assured, all deviant legal lenders will be appropriately dealt with.
Is there any alternative way to air your grievances without lodging complaints?
You might want to consider writing an honest, unbiased Google review of your experience with the licensed lender. Potential borrowers will likely blacklist the money lender and avoid any dealings with them, especially if other similar reviews also contain complaints against this money lender.
Where and how to find reliable lenders in Singapore quickly?
There are plenty of licensed lenders in Singapore for you to choose from just by referring to our compiled list of licensed money lenders in Singapore. However, narrowing down the top money lenders doesn’t have to be a stressful or difficult task.
The authorised lenders we work with are all highly qualified and experienced in their field. Sound financial advice and tips will definitely be dished out to help borrowers avoid being in a situation where they’re unable to pay their money lenders.
Simply use CompareSing to gather loan quotes from reliable licensed lenders in Singapore quickly and easily — all you need to do is fill out the online form, sit back and wait for our top money lenders to contact you with custom loan quotes tailored to your needs.
About the Author
Led by a team with invaluable expertise across Singapore’s licensed moneylending, banking, and finance industries, CompareSing provides users with a streamlined yet informative experience at every step of their loan journey.
