Notes to Borrowers
How much can I borrow?
The maximum interest rate moneylenders can charge is 4% per month. This cap applies regardless of the borrower’s income and whether the loan is an unsecured or secured one. If a borrower fails to repay the loan on time, the maximum rate of late interest a moneylender can charge is 4% per month for each month the loan is repaid late.
The computation of interest charged on the loan must be based on the amount of principal remaining after deducting from the original principal the total payments made by or on behalf of the borrower which are appropriated to principal. [To illustrate, if X takes a loan of $10,000, and X has repaid $4,000, only the remaining $6,000 can be taken into account for the computation of interest.]
What are the fees that moneylenders can charge?
All moneylenders are only permitted to impose the following charges and expenses:
(i) a fee not exceeding $60 for each month of late repayment;
(ii) a fee not exceeding 10% of the principal of the loan when a loan is granted; and
(iii) legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.
The total charges imposed by a moneylender on any loan, consisting of interest, late interest, upfront administrative and late fee also cannot exceed an amount equivalent to the principal of the loan. [To illustrate, if X takes a loan of $10,000, then the interest, late interest, 10% administrative fee and monthly $60 late fees cannot exceed $10,000.]
