Borrowing from a licensed moneylender? New cooling-off period starts Sep 15

For loans above S$5,000, they can keep up to 3.5 per cent of the principal amount of the loan, but not more than the loan approval fee charged. 

Currently, licensed moneylenders are allowed to keep the full loan approval fee and any accrued interest when a borrower cancels a loan.

Borrowers will need to repay only the remaining principal amount of the loan disbursed to them, after deducting the loan approval fee upfront, as well as the portion of the approval fee the moneylender is allowed to retain.

“There will not be any interest charged, and the total amount to be repaid by the borrower cannot exceed the principal amount of the loan,” MinLaw said.

Licensed moneylenders are moneylenders licensed under the Moneylenders Act. 

They are not allowed to solicit loans through text messages, phone calls or social media platforms. 

They must also meet the borrower in person at the approved place of business to conduct physical face-to-face verification of the borrower’s identity before granting any loan.