Man takes Rs 1.75 crore loan which grows to Rs 147 crore debt, after 4% interest per month

In high court, the borrower alleged that the rental agreement was merely a facade and that the loan documents involved deception, fraud, or breaches of statutory duties. (AI-generated image)

A Singapore man’s S$250,000 (about Rs 1.75 crore) loan from a licensed moneylender snowballed into a staggering S$21 million (around Rs 147 crore), forcing him to sell his S$2 million home and eventually triggering a high court‑ordered retrial to examine possible illegality in the transactions, The Straits Times reported.

The man had taken the loan in 2010. It carried an interest rate of 4 percent per month, with late‑payment interest at 8 percent per month, and an additional monthly late‑payment processing fee of S$2,500. Over four years, these charges pushed the debt from S$250,000 to S$3 million, far beyond the original principal.

By 2021, after years of compounding interest and penalties, the outstanding amount had swollen to S$21 million.

Selling the family home

Struggling to keep up with repayments, the borrower sold his home in July 2016 to the director of the moneylending company for Rs 14 crore. The move was made to ensure his family of five had a roof over their heads.

But, the sale came with a catch: he signed a tenancy agreement with the same director, agreeing to stay on as a tenant and pay between Rs 5 lakh and Rs 6 lakh per month in rent.

Debt still rising

Even after giving up ownership of the home, the debt continued to climb. The case surfaced publicly after a dispute over unpaid rent and the man’s refusal to vacate the property he had already sold.

High court steps in

When the matter went on appeal, high court judge Philip Jeyeratnam said the scale of the debt “shocked the conscience,” noting that a Rs 1.74 crore loan had somehow grown into “tens of millions” through interest and fees.

The borrower alleged that the rental agreement was merely a facade and that the loan documents involved deception, fraud, or breaches of statutory duties. The court said the circumstances surrounding both the loan and the home sale warranted closer scrutiny.

It has now ordered a retrial to determine whether the arrangements violated protections meant to prevent usurious lending practices.