No one can pressure you to take out a loan. The decision is entirely yours to make. Your employment agency provide you with a job, but they cannot force you to sign with a loan company. You should be cautious early on in the employment/loan process and do not be afraid to ask questions.
Here are some other points to consider.
Is this legal?
According to the Hong Kong Labour Department, you can legally be charged 10% of your first month’s salary for recruitment fees after successful placement. If you are being charged more or if you are unsure about whether the employment agency is acting legally, speak to the Labour Department and your consulate. The Labour Department’s hotline is +852 2157 9537 (Dial Ext. ‘11’ for English, Ext. ‘17’ for Bahasa Indonesia and Ext. ‘19’ for Tagalog)
Know your rights
The ‘Understanding Your Rights’ manual by charity HELP for Domestic Workers provides detailed information on your rights and what you can do if they are not being respected. You can seek legal advice from charities HELP for Domestic Workers or Mission for Migrant Workers, or visit a district office of the Duty Lawyer Service for free legal support.
Speak to your employer
Before taking out a loan (whether you need the money to pay off your recruitment or other fees), try to include your employer in the conversation if possible - they might not be aware that you are being charged for recruitment or might be able to offer you support.
Think first before taking out a loan
If you do feel you have to take out a loan, know that you do not have to choose the loan company that your employment agency is referring you to. You can explore other options and choose a loan company which you feel comfortable with and which offers you fair terms. We encourage you to consider lending from an ethical source. As much as possible, avoid getting into a cycle of debt and make sure you are protected from risk. Before signing a loan, first ask yourself:
Is the loan for a ‘need’ or a ‘want’?
Is the lender licensed? Unlicensed money lenders give illegal loan terms.
Will I receive certified documents (e.g. contracts, receipts, statements) for my records?
Do I understand the loan terms? Can I afford the monthly repayment and the late payment fees?
Will the lender keep my passport? It is illegal for anyone to do this except for me and the authorities.