Bank vs Licensed Money Lenders?

You know you will get amount as loan from bank if you are earning handsome money and have commercial and residential property in Singapore. The bank will happily lend you amount of money. Well if you are earning good money, you will not require taking loan from bank but in case you want to take, you are willing to take less loan but bank wanted to grant more loan. This is how it works.  Usually banks are considered as lender of last resort but there are many ways for people in Singapore to take up loan. Licensed money lenders and private money lenders are the two main lenders that you will find in Singapore. Who is more beneficial to you? This is question that you want to know the answer for.  Well, here you can find the answer which lender will suit you more. Legal money lenders are given the license by the registrar in Singapore to operate in country. The license will mark restriction and limitation on the amount of money they can lend and the amount of fees and the rate of interest they can charge. Money lenders are working as business, they are business owners and they want to build strong reputation in market. They don’t want to chase their borrowers or clients as it will mark negative impact on their business. They want to work like banks, give notices to clients and charge them penalties in case of late payments. Licensed money lender will work on following four operations:

  • Small loans
  • Interest rate
  • Speed
  • Forgiving credit assessment

Focus on small lending In Singapore, the licensed money lenders are focusing on giving small loans. Yes, they give short sum as loan and for small time period. Well, as per law you are entitled to get up to 3 to 4 months’ salary as loan from them but they are reluctant to give you such loans.  It means you will get money for urgent use and for small needs like paying amount to fix your car, clinical checkup or fee payment. Speed The speed of these licensed money lender to lend you loan is quick. They will give you amount as loan within 30 minutes. You just need to provide them with legal documents.  They give money on spot that usually banks don’t give. However, the amount of money will be lesser. Higher rate of interest Most of the licensed money lenders are working on higher rate of interest than banks. As most of the repayment time will last just for a few weeks or months, so interest rates money lenders charge will be on the higher side. Credit rating They don’t have a lot concern about your credit rating. No matter you have chance to improve it or not, they don’t access your credit rating like bank did. As they lend small amount as loan. To get loan on time without waiting too much, this is why people prefer to take loan from licensed money lenders in Singapore instead of banks.