Initiatives ‘could help, entice habitual borrowers’
When he got his first credit card four years ago, Mr Tay, 29, could not stop splurging on partying and luxurious meals. After chalking up hefty credit card bills, he turned to licensed moneylenders for a S$30,000 loan. But he was unable to repay in time, and the snowballing penalties meant he had to borrow even more to cover his original loans.
Before long, Mr Tay was S$60,000 in debt, owed to 18 different moneylenders.
“Because of my mentality ... that I needed more money, I found moneylenders as an easy way out. They (kept) calling ... and coming to my office. In every visit, they would include about S$100 in that letter of demand,” he recounted.
After finally coming to terms that he needed help, Mr Tay went to a church that helped him negotiate a three-year repayment plan involving S$100 monthly payments.
Still shaken by his experience, Mr Tay said he hopes the new regulations would help people think before turning to moneylenders.
“This is a good initiative from the Government. If they don’t impose a cap (on borrowing), there will be more people who will borrow as a routine,” he added.
The lower interests rates, however, could entice borrowers, given the convenience and accessibility moneylenders offer, Mr Tay feels.
LAURA PHILOMIN
