Unfortunately, with the economic downturn, we can expect to see more people turning to moneylenders ("Registry of Moneylenders issues new directions to curb abuses"; Jan 27).

Therefore, it is critical that the industry be tightly regulated.

People who turn to moneylenders should carefully consider the following:

First, compounded interest rates mean that borrowers could end up paying more than 10 times the original loan amount.

Second, there are avenues for better-regulated loan options.

Pawn shops, for instance, are less risky. The loan cannot snowball and if the loan cannot be repaid, the worst that can happen is that the pawned item is lost.

Third, they could borrow from friends or family, or seek help from the Credit Counselling Singapore if their debts have gone out of control.

Rohith Murthy