An astounding tale of debt from Singapore has left people shocked. A man borrowed 250,000 Singapore dollars (approximately 17 million rupees) from a licensed moneylending company. Due to high interest rates, late fees, and penalties, his debt skyrocketed to approximately 21 million Singapore dollars (around 1.46 billion rupees). Such was the pressure of debt that he was forced to sell his home.
The Frightening Web of Debt that Turned Life Upside Down
According to The Straits Times, this debt was incurred between 2010 and 2011. The moneylending company imposed an interest rate of 4% per month. Moreover, an additional late payment interest of 8% per month was charged for late repayments, along with a monthly processing fee of 2,500 Singapore dollars.
The cumulative effect of these charges caused the debt to balloon from 250,000 Singapore dollars to nearly 3 million Singapore dollars within just four years.
Selling the Home to Protect the Family
By July 2016, the situation worsened. Paying the installments became difficult, threatening the family's shelter. Under these circumstances, the man sold his home to the moneylending company’s director for 2.1 million Singapore dollars (around 140 million rupees). Yet, even after selling the house, the story didn’t end. He agreed to become a tenant in the same house, paying monthly rent between 7,000 and 8,500 Singapore dollars.
The Debt Continues to Climb
Despite selling the house, the debt continued to soar. Interest and other fees added up, and by the end of 2021, the total liability reached approximately 21 million Singapore dollars, which equates to about 1.46 billion rupees.
A Legal Battle in Court
The case came to light when both parties took the matter to the District Court over rent and eviction disputes. During the hearing, the court stressed the need to investigate whether there were any illegal aspects in the loan and rent agreements.
The judge expressed grave concerns, pointing out that the escalation of a loan from 250,000 Singapore dollars to millions due to interest and fees is a matter of conscience.
Claims by the Lender and Borrower
The director of the moneylending company opposed a retrial, arguing that the borrower was solely responsible for his predicament. Conversely, the borrower claimed the rental deal was a facade, urging an investigation into fraud or law violation in the loan deal. The judge also highlighted the necessity to explore how circumstances led to the man selling his house to the lender and subsequently renting it back. This is no longer just one person's ordeal; it raises pressing questions about high interest rates, debt traps, and the oversight of the moneylending system.
