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Loan Servicing Agreement for Singapore

Loan Servicing Agreement Template for Singapore

A Loan Servicing Agreement under Singapore law is a comprehensive contract that establishes the relationship between a loan owner and a loan servicer. It details the servicer's responsibilities in managing and administering a loan portfolio, including collection of payments, maintaining records, handling defaults, and reporting. The agreement must comply with Singapore's Banking Act, MAS regulations, and data protection laws, while incorporating specific requirements for the Singapore financial services sector.

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What is a Loan Servicing Agreement?

The Loan Servicing Agreement is essential when a loan owner wishes to outsource the administration and management of their loan portfolio to a specialized servicer. This document, governed by Singapore law, outlines the servicer's duties, including payment collection, borrower communication, default management, and compliance with local regulatory requirements. It's particularly relevant for financial institutions operating in Singapore's regulated banking sector and must align with MAS guidelines and the Banking Act.

What sections should be included in a Loan Servicing Agreement?

1. Parties: Identification of the loan servicer and the loan owner/originator

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Appointment and Authority: Scope of servicer's appointment and delegated authorities

5. Servicing Obligations: Core responsibilities and duties of the loan servicer including collection, payment processing, and reporting

6. Compliance Requirements: Obligations relating to regulatory compliance, AML/CFT requirements, and data protection

7. Fees and Expenses: Compensation structure and reimbursable expenses

8. Reporting Requirements: Regular reporting obligations and formats

9. Representations and Warranties: Standard representations and warranties from both parties

10. Term and Termination: Duration of agreement and termination provisions

11. Liability and Indemnification: Limitations of liability and indemnification obligations

12. Confidentiality: Provisions regarding confidential information and banking secrecy

13. General Provisions: Standard boilerplate clauses including governing law, notices, and amendments

What sections are optional to include in a Loan Servicing Agreement?

1. Special Servicing Provisions: Additional provisions for handling defaulted or non-performing loans

2. Sub-servicing: Terms and conditions for engaging sub-servicers

3. Securities Custody: Provisions for holding and maintaining loan security documents

4. Technology and Systems: Requirements for loan servicing systems and technology infrastructure

5. Business Continuity: Disaster recovery and business continuity requirements

What schedules should be included in a Loan Servicing Agreement?

1. Schedule 1 - Serviced Loans: Detailed list and characteristics of loan portfolio being serviced

2. Schedule 2 - Fee Schedule: Detailed breakdown of fees, charges, and payment terms

3. Schedule 3 - Service Levels: Performance metrics, service standards, and KPIs

4. Schedule 4 - Reporting Ƶ: Standard formats for required reports and notifications

5. Schedule 5 - Operating Procedures: Detailed procedures for loan servicing activities and workflows

6. Schedule 6 - Required Insurance: Insurance requirements and coverage details

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Singapore

Publisher

Ƶ

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions
































Clauses






























Industries

Banking Act (Cap. 19): Primary legislation that regulates banking business and financial institutions in Singapore, setting requirements for licensed banks and financial institutions

Securities and Futures Act (Cap. 289): Regulates securities trading and financial markets, relevant when loans involve securities or securitization

Moneylenders Act (Cap. 188): Governs licensed moneylenders and their operations, applicable when loan servicer handles consumer loans from licensed moneylenders

Personal Data Protection Act 2012 (PDPA): Regulates the collection, use, and disclosure of personal data, crucial for handling borrowers' information and data protection obligations

MAS Notice 634: Regulatory guideline on banking secrecy issued by the Monetary Authority of Singapore

MAS Guidelines on Outsourcing: Regulatory framework for financial institutions' outsourcing arrangements, including loan servicing

MAS Technology Risk Management Guidelines: Guidelines for managing technology risks in financial institutions, including loan servicing operations

MAS Fair Dealing Guidelines: Guidelines ensuring fair treatment of consumers in financial services

ABS Code of Consumer Banking Practice: Industry standards set by the Association of Banks in Singapore for consumer banking practices

Contract Law (Cap. 43): Fundamental legislation governing contract formation, terms, and enforcement in Singapore

MAS Notice 626: Requirements for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in banking operations

Fair Trading Act: Legislation protecting consumers against unfair practices in transactions

Insolvency, Restructuring and Dissolution Act 2018: Framework for handling defaulted loans, debt restructuring, and recovery procedures

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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