18 May 2010 Posted in Press releases
Mr Yeo Guat Kwang, Member of Parliament, Aljunied GRC
To ask the Minister for Law whether MAS will consider requesting all licensed moneylenders to reveal the effective interest rate charged to enable borrowers to reveal the effective interest rate charged to enable borrowers to understand the offer and make an informed choice.
Under the amendments to the Moneylenders Act, which took effect on 1 March 2009, licensed moneylenders must inform the borrower of all the terms and conditions of the loan in a language he understands, before granting the loans. This information includes the interest rate charged (which is to be expressed as a percentage per annum), how the interest is calculated, and all other charges, such as administrative fees or late payment charges.
The moneylender is also required to give the borrower a copy of the loan contract and provide half-yearly statements of account. These statements must contain (i) details on the principal, interest and permitted fees outstanding, (ii) the amount of interest and permitted fees payable and their due dates, and (iii) past payments broken down into repayment of principal and payment of interest and permitted fees, if any.
Last updated on 25 Nov 2012