Money Lenders Ordinance

The following summaries of the provisions of the Money Lenders Ordinance are essential to safeguard the parties to the loan agreement and should be read carefully. This summary is not part of the illegal example, and if in doubt, you should refer to the relevant provisions of the Money Lenders Ordinance.

Part III of the Money Lenders Ordinance - Transactions made by money lenders
Article 18 of the Ordinance sets out the provisions governing the establishment of loans by money lenders. Each loan agreement must be entered into in writing and signed by the borrower within 7 days after the agreement is made and before the loan is made. When signing the agreement, a summary of the signed agreement must be given to the borrower together with a copy of this summary. The summary should contain detailed details of the loan, including repayment terms, form of guarantee and interest rate. An agreement that does not comply with the above shall not be enforced unless the court is satisfied that it would not be fair not to enforce the agreement.

Section 19 of the Ordinance stipulates that if the borrower makes a written request and pays the stated fee for the expenses incurred, the lender must provide the borrower with an original and a copy of the statement of settlement regarding the borrower's debt situation under the loan agreement (including amounts repaid, due or about to be due, and interest rates). The borrower must sign on the copy of the statement of settlement to acknowledge the receipt of the original statement, and return the signed copy to the lender. The lender must retain the returned copy of the statement of settlement throughout the period related to the agreement. Failure to comply with this requirement by the lender is considered a criminal offense. If the borrower makes a written request, the lender must also provide copies of any documents related to the loan or guarantee. However, such requests may not be made more than once within a month. If the lender fails to comply with the requirements without valid reasons, they cannot charge interest during the period in which the request was not complied with.

Section 20 of the Ordinance provides that, unless the guarantor is also a borrower, the guarantor shall be given a signed summary of the agreement, a letter of guarantee (if any) and a statement detailing the total amount to be paid, unless the guarantor is also a borrower. If the guarantor requests in writing 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 a money lender fails to comply without good cause, the guarantee may not be enforced during the period during which the request is not complied with.

Article 21 of these Ordinance stipulates that the borrower may, upon written notice, repay the loan and the interest calculated up to the date of repayment at any time, and the money lender shall not levy a higher interest rate because the borrower makes early repayment.
If the money lender is a recognized money lender or a member of a recognized association as specified in Section 33A(4) of the Money Lenders Ordinance, as gazetted by the Financial Secretary, the above provision does not apply.

Section 22 of these Ordinance stipulates the payment of compound interest or refusing the repayment of the loan in installments is considered illegal. Furthermore, any loan agreement that sets a higher interest rate for unpaid amounts after the due date is also illegal. However, such an agreement can be established where the unpaid principal and interest are subject to simple interest, provided that the interest rate does not exceed the rate that would have been payable in the absence of default. If a court accepts the agreement and determines that it is unfair due to non-compliance with these provisions, the entire or partial illegitimate agreement may be declared legal.
Section 23 of the Ordinance states that a loan agreement with a money lender and any security given for the loan will not be enforceable if the money lender was unlicensed at the time of making the agreement or taking the security.
If the court deems that the agreement or guarantee cannot be enforced as unfair due to these provisions, this maybe declared that the agreement or guarantee, in whole or in part, can be enforced.

Part IV of the Money Lenders Ordinance - Excessively high interest rates
Section 24 of the Ordinance sets the maximum effective interest rate on any loan at 48% per annum (the "effective interest rate" shall be calculated in accordance with Schedule 2 to the Ordinance). Any loan agreement that stipulates a higher effective interest rate is not enforceable and money lenders can be prosecuted. This maximum interest rate can be changed by the Legislative Council, but existing agreements remain unaffected. This section does not apply to loans made to or persons making loans to companies with a fully paid share capital of not less than $1,000,000. (Article 3 of No. 23 of 1999)
Section 25 of the Ordinance provides that in court proceedings for enforcement of a loan agreement or enforcement of a loan guarantee, or when the borrower or the guarantor himself applies to the court for relief, the court may examine the terms of the agreement to see whether the terms are grossly unfair or the interest rate is too high (if the effective interest rate exceeds 36% per annum or other interest rate fixed by the Legislative Council, it may be presumed to be too high on that ground alone), and the court, having regard to all the circumstances, may vary the terms of the agreement so that it is fair to the parties. This section does not apply to loans made to or to persons making loans made to companies with a fully paid share capital of not less than $1,000,000. (Article 3 of No. 23 of 1999) (enacted in 1988)

Product Terms and Conditions

1. Employed individuals only need to provide their identity card and mobile phone details to apply. If the customer only provides identity card and mobile phone for application, the loan amount is capped at HK$50,000 and the annual interest rate is not less than 20% after discount. If the customer provides additional supporting documents, it may help to obtain a better loan amount.
2. Only applicable to customers who choose to sign the loan agreement online, provided that the customer meets the relevant loan conditions of the Company's "Online Contract Signing" service.
3. If there is any discrepancy in the interpretation of the contents, the interpretation of the Company shall prevail.
4. The Company reserves the right to change the terms of this promotion and the final decision on loan approval at any time.