Money Lenders Ordinance
The format of the summaries of the provisions of this Ordinance that must be included in or attached to the extract of the loan agreement or memorandum. The summaries of the provisions of the Money Lenders Ordinance listed below are very important to protect all parties to the loan agreement and should be read carefully. The summary is not part of the illegal law. If in doubt, you should refer to the relevant provisions of the Money Lenders Ordinance.
Summary of Part III of the Money Lenders Ordinance-Transactions by Money Lenders
Article 18 of this Regulation sets out the requirements for money lenders to make loans. Each loan agreement must be concluded in writing and signed by the borrower within 7 days after the agreement is made and before the money is loaned out. When signing the agreement, an abstract of the signed agreement must be given to the borrower together with this summary. The summary must contain detailed details of the loan, including repayment terms, guarantee form and interest rate. An agreement that does not meet the above requirements shall not be enforced unless the court is satisfied that it is unfair not to enforce the agreement.
Article 18 of this Regulation sets out the requirements for money lenders to make loans. Each loan agreement must be concluded in writing and signed by the borrower within 7 days after the agreement is made and before the money is loaned out. When signing the agreement, an abstract of the signed agreement must be given to the borrower together with this summary. The summary must contain detailed details of the loan, including repayment terms, guarantee form and interest rate. An agreement that does not meet the above requirements shall not be enforced unless the court is satisfied that it is unfair not to enforce the agreement. Article 19 of this Ordinance stipulates that if a borrower makes a written request and pays prescribed fees for related expenses, the money lender shall have the borrower’s current debt situation under the loan agreement (including repaid, due or imminent) The original and a copy of the settlement statement of the payment and interest rate) will be given to the borrower. The borrower must endorse text on the copy of the settlement statement to indicate that it has received the original settlement statement, and return the copy of the settlement statement so endorsed to the money lender. The money lender must retain a copy of the returned settlement statement for the duration of the agreement related to the settlement statement. If the money lender fails to comply, it is a crime. If the borrower makes a written request, the money lender must also provide copies of any documents related to the loan or guarantee. However, the above requirements cannot be made more than once within a month. If the money lender fails to comply with the requirements described in this paragraph without good reason, it shall not charge interest during the period when the requirements are not complied with.
Article 20 of this Ordinance stipulates that unless the guarantor is also a borrower, the guarantor shall be given a signed summary of the agreement, a guarantee document (if any) and detailed requirements within 7 days after the agreement is made. The statement of the total payment. If the guarantor makes a written request at any time (not more than once in a month), the money lender must give him a signed statement detailing the total amount paid and the total amount owed. If the money lender fails to comply with it without sufficient reasons, it shall not enforce the guarantee within the period of failure to comply with the requirement.
Article 21 of these regulations stipulates that the borrower can repay the loan and the interest calculated up to the repayment date at any time after a written notice, and the money lender shall not impose a higher interest rate due to the early repayment of the borrower.
If the money lender is a money lender or a member of a recognized society approved by the Financial Secretary under section 33A(4) of the Money Lenders Ordinance, the above provisions shall not apply.
Article 22 of this Ordinance states that any loan agreement that stipulates the payment of compound interest or stipulates that the loan is not allowed to be repaid in installments is illegal. In addition, it is also illegal for any loan agreement to charge a higher interest rate for unpaid payments due to maturity. However, the agreement can be stipulated that the outstanding principal and interest shall be charged simple interest, but the interest rate shall not exceed The interest rate that must be paid in the absence of arrears; but if the court is satisfied that the agreement is illegal and unfair because it does not comply with the provisions of this article, it may declare the illegal agreement in whole or in part legal.
Article 23 of this Ordinance states that if a money lender does not have a license when entering into a loan agreement or accepting a loan guarantee, the loan agreement with the money lender and the guarantee given to him shall not be enforced; but if the court is satisfied, If it is unfair that the agreement or guarantee cannot be enforced due to the provisions of this article, it may be declared that all or part of the agreement or guarantee is enforceable.
Summary of Part IV of the Money Lenders Ordinance-Excessive Interest Rates
Article 24 of this Ordinance determines that the maximum effective interest rate of any loan is 60% per annum (the "effective interest rate" shall be calculated in accordance with Schedule 2 of this Ordinance). Any loan agreement that sets a higher effective interest rate cannot be enforced, and money lenders can also be prosecuted. This maximum interest rate can be changed by the Legislative Council, but existing agreements will not be affected. This article does not apply to a loan made to a company with a paid-up capital of not less than $1,000,000 or to a person making such a loan.