By Ho Lian-Yi

HERE'S an offer that is crying for caution: Borrow $60,000 from a bank to buy a car, and someone else will pay you $5,000 in cash.

The catch: You won't be able to touch the car because the person who pays you the cold cash will rent it out - in your name.

This is among the latest illegal loan schemes cooked up by unscrupulous loan brokers to lure and make use of cash-strapped Singaporeans.

The idea is to dupe banks into lending money to car-buyers so that brokers can then rent out the car illegally to make money.

These brokers have been marketing their scheme by dropping fliers at some housing estates. A resident who lives in Serangoon North tipped off The New Paper on Sunday after he tried to apply for the loan.

'Worse than loan sharks'

Eric (not his full name), 26, an executive, found a flier with the words, "Need cash?" emblazoned on it. It was stuck to his door and it promised "$10,000 quick. No gimmicks or guarantors needed".

He called the person listed on the flier and was told about the car-buying deal.

Eric said: "They are worse than loan sharks. At least loan sharks put up their own money."

With Eric's help, The New Paper on Sunday also contacted the broker at an office in an industrial building near Macpherson Road.

Outside, it was just large blue doors. There was no signboard.

Inside, it looked like any other office. There were potted plants, desks, and a meeting room dominated by a large painting.

The man we spoke to was a stout fellow who wore his shirt tucked in and a Bluetooth headset plugged into his ear.

He claimed he used to work at a bank. "So I know all the loopholes," he said.

The car loan scheme was win-win for all, he touted. He said that the car rental company would get a car without the usual huge downpayment, and you could get $5,000. The broker himself gets a "small" commission.

He claimed that after you leased the car to the car rental company, it would then service the loan for the duration that it holds the car, usually up to five years. After the car is returned to you, you take over the loan repayments.

No licence? Never mind. You just get someone with one, he said. If not, he added, "we have someone".

If you need more than $5,000, you can get more cash by taking up yet another loan - the "education loan".

It was another way of getting quick cash at a low interest, the broker said.

He added: "The only people who knows are you, me and one person at the school."

Essentially, you apply for a $17,500 loan even though the course costs just $8,650, the broker said of his deal.

After paying for the course, you still have a balance of about $8,000. You don't have to study for the course - he claimed he would get someone to sit in for you.

The difference from a personal loan was that you just pay 5 per cent interest on the $8,000, he tried to pitch. (A check with a local bank's website showed that a 17-per-cent interest rate applied on its personal loan.)

But don't you actually pay interest on the entire loan of $17,500, not just the $8,000? "Yes, but you get a diploma out of it," he said without missing a beat.

Taken together with the car loan, that means you can get up to $13,000 in cash.

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