The placement loan is a financial arrangement that enables domestic helpers to work in Singapore without requiring employers to pay large upfront agency fees. Understanding how this system works helps both employers and helpers navigate the direct hire process.
What Is a Placement Loan?
When a helper arrives in Singapore through a direct hire arrangement, they typically need assistance covering initial costs: documentation, processing fees, and sometimes basic living expenses before their first salary. The placement loan covers these costs, and the helper repays it gradually from their monthly salary.
How the Repayment Works
The loan is repaid through salary deductions over several months. For example, with a $600 monthly salary and a standard placement loan:
- Upon arrival: The helper receives a portion of their loan upfront for immediate needs
- Months 1–4: A larger portion of salary goes toward loan repayment
- Months 5 onward: Once the loan is cleared, the helper receives their full salary
This structure ensures helpers are not trapped in debt while giving them the opportunity to work in Singapore. The repayment period is typically 4–6 months, depending on the loan amount and salary level.
What This Means for Employers
Employers pay zero agency fees to the platform. Your primary financial obligation is the helper's salary, which you pay directly to them. The platform manages the loan structure with the helper independently—this does not involve employer funds.
Benefits of the Placement Loan Model
Transparency: All terms are clearly documented before deployment. No employer debt: Employers are never responsible for the placement loan. Helper protection: Repayment schedules are designed to ensure helpers retain sufficient living expenses. Regulatory compliance: The arrangement adheres to MOM guidelines regarding helper welfare.
MimiDirect manages this process while keeping employer costs minimal. You focus on finding the right helper; we handle the financial infrastructure that makes direct hire possible.