Currently, there is technically no legal minimum or cap on the amount that an individual can borrow from a licensed money lender (as of April, 2019). Usually, the maximum amount that can be borrowed, as well as the loan repayment schedule, are calculated by the loan company based on the domestic worker’s salary and the length of her visa. Of course, it is up to the domestic worker to negotiate and decide if she agrees to sign the contract.
Many loan companies will also provide tempting offers to domestic workers who they know need the money or who have borrowed before. For example, they might call up those with existing loans and offer them the chance to renew their loan or to borrow a higher sum, increasing the overall amount owed.
If they have an existing loan with a money lender or if they’re not eligible to borrow for some reason, some domestic workers might turn to unlicensed money lenders or individuals to borrow money. As these are illegal and unregulated, domestic workers can borrow small or large amounts and might also be subject to illegal and unethical lending practices, such as high late fee charges, passport retention or extremely high interest rates (e.g. 20% per month) which can rapidly increase the overall amount owed and spiral out of control.