If you have ever taken or considered taking a loan from a Money lender in Singapore, then you know how inflexible the loan agreement can be.
While there are instances where a loan agreement can be changed, there are sections that cannot be changed. Notably, in cases where loan agreement changes are necessary, the money lender must seek consent from the borrower.
Therefore, in this post, we’ll unpack the answer to this critical question as well as first define what loan agreements are.
Loan Agreements Overview
A loan agreement is a written document outlining details regarding the interest rate on your loan, schedule, method of repaying the credit facility, late fees for late payments charged, and generally, terms mutually agreed upon are drafted.
A loan agreement stipulates the consent given to protect the interests of both parties. Usually, when you reach an agreement with a licensed money lender in Singapore, you enter a legally binding contract.
Can the Terms Be Changed?
Once a licensed money lender and the borrower have entered into a loan agreement, the former cannot change any of the latter’s conditions unilaterally. This is because they, too, are under that contract, just as are you. Therefore, if they wish to effect some changes, it should be done by mutual consent and in writing many times.
For instance, if a money lender intends to change something in the agreement, either on the repayment time or readjust the rate of interest, then they must come to you for mutual agreement. It is not that they would wake up, and changes in the agreement would have been made without your concern.
However, be cautious of unlicensed moneylenders or loan sharks who may not follow these rules. Since they operate extra-legally, they may try to enforce changes or other unfair practices. To be sure of protection, only use licensed lenders.
How can Changes in Loan Agreements be implemented
Since the moneylender cannot change the loan agreement without your consent, knowing your rights and responsibilities in effecting changes in the loan agreement is essential.
Most importantly, you can request a change. There are those instances when you would want to request a change in the loan terms. For instance, when your financial situation has probably changed, and you are not in a position to pay the regular amounts as agreed upon in the contract. You may speak with your lender about restructuring your loan on different grounds. The new terms are recorded in a new agreement when the lender accepts.
Worth noting, too, is the fact that licensed money lenders in Singapore are usually willing to work with borrowers who show good faith and a real need for adjustments. Communication is key, and one should not wait until payments have fallen behind. In fact,
Protect Yourself as a Borrower
To protect yourself, read the fine print on the loan agreement before signing. Look for any clauses that can be changed sometimes and under certain circumstances. This is because most licensed lenders tend to play by the book. Therefore, reading would add peace of mind.
Importantly, if you have doubts about a money lender’s reputation or practices, do not hesitate to file a complaint against them to the Registry of Moneylenders. That is your right if you are borrowing in Singapore.
Conclusion
While none of the details in the loan agreement can be changed unilaterally by a money lender in Singapore, being informed is essential.
Therefore, for any changes in the loan agreement to be made, you have to work closely with your licensed lender and keep the lines of communication open.
This will give you confidence in your borrowing journey since you know that financial agreements are partnerships, not sources of stress caused by uncertainty about what might happen without you being informed.
At JR Credit, we are committed to ensuring transparency and building client trust. We ensure our clients know their rights and responsibilities in upholding the loan agreement. Contact us today advise on how to handle the loan agreements.