From 1 June 2012 onwards, moneylenders are required to compute and disclose to you the Effective
Interest Rate of the loan, before the loan is granted. If your annual income is less than $30,000, the
interest rate which moneylenders can charge, for both secured and unsecured loans, is capped at:
Interest Rate of the loan, before the loan is granted. If your annual income is less than $30,000, the
interest rate which moneylenders can charge, for both secured and unsecured loans, is capped at:
- 13 per cent Effective Interest Rate for secured loans; and
- 20 per cent Effective Interest Rate for unsecured loans.
The Effective Interest Rate takes into account the compounding effect of the frequency of
instalments over a one‐year period. This means that Effective Interest Rate better reflects the actual
cost of borrowing over a one‐year period. Visit www.ipto.gov.sg to find out more about how the
Effective Interest Rate is calculated from 1 June 2012.
If your annual income is $30,000 or more, the caps above are not applicable and interest rate is to be
agreed upon between the moneylender and the borrower.
About The Author
No comments:
Post a Comment