Before getting a loan, there are a few things in mind that you have to consider and know. Recently, the Ministry of Law in Singapore launched the Moneylenders Credit Bureau (MLCB) on March 1, 2016, in an attempt to centralise information about all loans applied for, taken, or repaid through licensed moneylenders in Singapore. Access to this information is restricted only to the Ministry of Law, the Registry of Moneylenders, borrowers, and licensed moneylenders.
So who is going to benefit from the formation of MLCB? Well, it is a win-win for both parties. Moneylenders now have enough information to review the creditworthiness of a loan applicant, while borrowers have to avoid borrowing beyond their limit – which actually helps them to improve their credit rating. Whether you are a borrower or a lender, you may have a number of questions about the Moneylenders Credit Bureau, including how it works, and how it might affect your credit rating. So here’s a little 101 for you.
The MLCB collects information about loan applicants or borrowers from the licensed moneylenders in Singapore. It is mandatory for all licensed moneylenders in Singapore to be a contributing member of the MLCB. They provide the bureau relevant information about their borrowers and loan applicants. The MLCB, in turn, helps a licensed lender with information about any borrower or loan applicant, so that they can make an informed decision about the creditworthiness of the applicant.
All contributing members or licensed moneylenders need to submit a borrower credit report to the MLCB. The report should include the following information:
Both borrowers and lenders (contributing members of the MLCB) can access this report in order to make an informed decision about borrowing or lending. Borrowers need to pay $1 for each report, while licensed lenders can get the report for only 50 cents. Typically, a borrower credit report is updated real time; however, information about the latest repayment is usually updated on the next working day.
It’s simple. You need to add the borrower’s outstanding amounts from all active loans with their approved in-principle loan amounts in finding out their total amount payable.
Once any discrepancy is reported, the MLCB takes the below steps:
One important thing to note: If an in-principle loan was approved but still pending the final approval, it would still be considered as an active loan. If you applied for any such loan, it could affect your total outstanding principal amount, until the loan application gets rejected. So it is advisable that you should ask your moneylender to dispose of any application for loans that you no longer need.