How To Ban Someone From Taking A Loan With A Money Lender
January 20, 2024
Obtaining a loan from a money lender allows you to get quick access to cash.
But despite its benefits, there is always the risk of landing in the hands of loan sharks that can subject you to illegal practices.
After all, life is full of unexpected turns, some of which may might force you to take a loan. If you are not careful, taking a loan from rogue lenders can land you in trouble.
The Moneylenders Credit Bureau (MLCB) regulations protect lenders and borrowers from illegal practices. The MLCB has data on borrowers’ loans and repayment history with licensed lenders.
Note that the Moneylenders Act does not allow the MLCB to collect data about your bank’s deposit or credit facilities, nor make any lending evaluation on behalf of any lender.
MLCB information helps lenders to determine whether to approve a loan and how to ban someone from a money lender.
The latter is a necessary move against those who keep taking loans they cannot repay.
Knowing how to ban someone from a money lender helps save those who are in financial trouble.
It also protects the moneylending industry from unnecessary borrowing or people with bad credit history.
This information from the MLCB is not available to third parties – it’s only useful for purposes of predicting.
How MLAS Offers Protection From Loans
Singapore’s moneylending sector has been taking measures to improve its services.
The Moneylender’s Association of Singapore (MLAS) ensures that training is done among money lenders and has a uniform training system in place.
The association made changes to improve the industry and protect borrowers. This body has been protecting borrowers by cooperating with licensed money lenders regulated by the Ministry of Law.
To bolster the moneylending industry, the Singapore government established various associations, such as the MLAS, to aid borrowers and creditors.
It has charters, philosophy, and a code of conduct that it uses as it represents the interests of lenders and borrowers in the country.
The association was meant to expand the moneylending industry as it helps protect its members’ interests and ensure all licensed lenders are members.
The association fights for and preserves practices in the industry while cultivating this sector as an essential part of national business.
The MLAS has laid down rules and objectives for licensed money lenders. It offers protection in the following ways:
Online Loan Tracking And Borrowing Reporting System
It performs due diligence by creating an online loan tracking and reporting system.
This helps lenders in getting detailed reports about borrowers. It holds briefings on ongoing litigations, frequency of borrowing, and any restrictions given to the borrower.
This shortens the time money lenders take to process loans. Therefore, it protects lenders from those with bad credit history since they can easily get their information and avoid giving them loans.
Organise Professional Training
Training and seminars are held to discuss the latest issues and improve lenders’ skills.
The MLAS offers comprehensive training sessions for those sitting for the Money Lenders Test, a requirement for a license.
In this way, it regulates the lending industry by protecting individuals from unlicensed money lenders.
Do Not Lend Directory
To offer more protection from loans, the MLAS offers a feature on its website called the Do Not Lend Directory.
Anyone can apply this directory to request money lenders to not lend to their loved ones if they request a loan.
You can visit its website and submit verification documents for the request. You will be charged $50 as a request fee, payable to the Moneylenders’ Association of Singapore.
Note that a licensed lender cannot be prevented by this directory, even if the borrower is on the list.
This directory is accessible by members of the MLAS. So licensed money lenders that are not members of this association will not have access to this directory.
Every loan a person takes in Singapore is reported to the credit bureau.
These include your current loans that are already paid, and those you defaulted on.
The MLCB report is used by lenders to check how much risk you pose to lenders if given a loan based on your ability to settle debts.
Blacklisted Money Lenders In Singapore
These are deviant licensed money lenders that broke the rules stipulated in the Moneylenders Act.
After this, they were suspended and blacklisted on the Registry of Moneylenders.
As a borrower, you should always check the Registry’s website to verify if the lender is blacklisted. Check its business registration documents.
The list is updated monthly to ensure that those who abide by its rules can operate.
If you don’t find a lender’s name on the list, it may be unlicensed or a blacklisted money lender in Singapore.
Lately, there have been complaints of blacklisted money lenders in Singapore impersonating licensed lenders.
You can find a good money lender by checking customer reviews from trusted market sources.
The MLCB ensures licensed lenders can identify the risk of default so they don’t have to worry about losing money.
Borrowers are not likely to default if they are limited in the loans they can take. This protects them from falling into bad debts.
They can also file for self-exclusion reports with the bureau to voluntarily bar themselves from applying for unsecured loans from licensed money lenders.
When To Ban Your Loved One From Taking A Loan
When in difficult times, a person may approach a money lender for a quick loan.
But this could result in repayment problems or loss of property.
Well-meaning family members or friends will be sucked into the financial problems of their loved ones. Here’s how you can ban your loved one from taking a loan.
When They Cause Stress And Insecurity
Loans can have devastating effects on your loved ones. They lead to financial problems, such as the risk of foreclosure or eviction.
Most loans result in debts as the borrower cannot afford other important commodities.
Your loved one may end up paying high interest rates and other bills that accrue, such as medical expenses, which become a burden.
In such cases, you can help ban him or her from taking a loan and advise other options for financial aid.
When Repossession Threatens Their Job And Family Care
For some loans, there are high chances that the borrower’s property will be repossessed if he or she cannot pay on time.
This threatens child or family care. Child or family care is necessary for working parents, however, loans may force them to leave their children under the care of relatives and friends.
This may cause children to be neglected.
When It Leads To Family Instability Or Domestic Violence
The costs of a loan do not halt at financial problems or losing property – they can cause domestic problems and violence.
Lenders may seize collateral to recover a loan. This can cause family tension. For a family that is mired in financial debt, marital issues could arise.
If this is happening in your family, approach social services to see if your loved one can get help to recover from debt problems.
Documents Required To Ban Someone From Taking A Loan
When banning a loved one from taking a loan, you need to submit these documents:
- Proof of relationship to the person. For instance, a marriage certificate for a spouse or a birth certificate for a parent-child relationship.
- A cover letter stating why you wish the person to be in the list of Do Not Lend Directory, along with your full name and contact details.
- Copy of the requesting individual’s NRIC
- A $50 cheque payable to the Moneylender’s Association of Singapore.
What The MLCB Self-Exclusion List Is About And Who Can Apply
The MLCB self-exclusion listing is a service that allows anyone to voluntarily apply to be barred or excluded from acquiring unsecured loans from licensed money lenders.
Anyone who is a resident of Singapore can seek self-exclusion. Domestic and foreign workers can also request their employers to prevent them from getting loans from licensed money lenders.
This tool is available through the Moneylenders Credit Bureau. It bars lenders from giving loans to Singapore citizens, permanent residents, and foreigners on the list. Third parties can also apply for this exclusion list on behalf of potential clients only if permission is given by the individual as stated by the Ministry of Law.
How To Register For A Self-Exclusion Listing
To register for a self-exclusion listing, get your Singpass, and apply through the MCLB website.
If you don’t have Singpass, you can allow a third party to apply on your behalf through the website. The person you authorise to apply on your behalf will need to submit some documents online.
These documents include: proof of the relationship between you and the authorised person, a self-exclusion listing registration or a Withdrawal Authorisation Form that you have correctly filled out, and a personal identity document of the person requesting to be excluded.
Note that if you authorise a third party, the effect will not be immediate.
The MCLB will require you to confirm the supporting documents before sending an email to you and the authorised person about the status of the application.
Effective Period Of Self-Exclusion
By applying for a self-exclusion listing, it means an individual agrees not to borrow from a licensed money lender until the self-exclusion period expires.
The ban cannot be lifted within the period even if one urgently needs to borrow. It will remain effective until it is withdrawn.
Cost Of The Self-Exclusion Listing
The amount you will be required to pay is a registration fee of $1.50. The same fee applies when one wants to withdraw from the list. You will pay $2.60 if you submit your application through another person.
How To Verify You Have Been Excluded
To know if the self-exclusion application was successful, you may buy a copy of your Loan Information Report from the MLCB, which shows details about your Self-Exclusion Listing and its minimum period.
Protection Measures Are In Place For Borrowers And Lenders
Suffice to say you have enough options if you find yourself in an emergency financial situation.
Although blacklisted money lenders in Singapore can cause financial trouble, you can visit a licensed money lender and talk to it about your issue.
But you must know your financial situation and what you want.
The Ministry of Law established an Act that introduced a self-exclusion listing and a system that enabled borrowers to have more autonomy in their borrowing.
This is designed to prevent debts due to uncontrolled borrowing.
Always conduct careful research to determine a lender’s credibility. Confirm its licensed status at the Ministry of Law’s website.
Check whether the licensed money lender is following the stipulated guidelines and regulations. If you follow this advice, you can be assured of your financial safety.
Among the best and most reliable lenders in Singapore is Credit Thirty3, which offers various loan types depending on your needs.