Who Are Money Lenders? What Do They Do?
Money Lenders are people who provide a loan to the people who cannot borrow loan from banks. The reason being so, they do not have any proper collateral security to show it to the banks. Moneylenders do not require any collateral security. They would just require you to show your salary. People who have bad or poor credit scores can also ask for money from money lenders with a high rate of interest.
Advantages of Money Lenders
There are various advantages if you can choose the right moneylender, this includes:
- Credit Score- One of the biggest problems that people face while getting a loan is a poor credit score. Banks do not provide loans to people who have poor or bad credit. They provide loans to people with good credit scores so that they can repay the loan amount. For people with poor credit scores, they can go for money lenders. As Moneylenders don’t check your credit score while providing loans. Thus, the struggle to get loans with poor credit score gets eliminated.
- Loan amount- If the loan amount is small then you can choose money lenders. If the loan amount is large then you can go for banks. The reason being that you can repay the loan amount to the money lenders as per your requirements while in case of banks, you need to follow the bank’s guidelines while repaying the loan. Small Venture Businesses opt for taking a loan through the best money lender in Singapore.
- Instant loan- One of the biggest advantages of taking up loans from money lenders is they provide the loan instantly. If you have all the documents that they require the loan will be approved then and there, in some cases it will hardly take you two days to get the loan. Banks require a lot of paperwork to be done to get the loan approved. It can take up to two weeks to get the loan approved. For those who require instant money and cannot wait for two weeks to get the loan from banks, money lenders are the best choice.
- Flexibility- People who don’t have a bank account or they do not have any asset to show it to the banks, money lenders are the best choice. Moneylenders do not need any security deposit for your loan. They will just ask you to show your payment slip. If you fail to repay the loan amount, in case of banks, they would take over that collateral security. For more information visit Lender.sg.
Disadvantages of Money Lenders
The disadvantages of money lenders are:
- Interest Rate- Money Lenders charge a high rate of interest for the loan amount. This is because of the risk they take up. The interest rate can be between 20%- 35%. Many people would struggle to repay to pay the interest amount. Thus, if you are looking for taking up a loan from money lenders, make sure you can repay the loan amount with such high-interest rates.
- Illegal Money Lenders- There are a lot of illegal money lenders working in Singapore. It can difficult to differentiate which a licensed one is or which one isn’t. The Registry of Money Lenders in Singapore has a list of all the licensed money lenders in Singapore. Thus, before you choose a moneylender, make sure it is registered in the Money Lenders Singapore. Illegal money lenders would operate through SMS, phone calls and online. Licensed Money Lenders would have an office from where they would operate. Thus, always meet the person face to face before choosing a money lender.
Eligibility for the Loan Requirements
There are various criteria to be fulfilled before taking up a loan. They are
- Identification proof of whether you are a resident of Singapore is required
- People between the age brackets of 21-65 years can take up loans from the money lenders Singapore.
- People staying in Singapore as foreign nationals and require loans then they require showing certain details like how long have you been staying here?
- Moneylenders don’t require any collateral. However, you need to have an annual salary of $20,000 per annum if you are looking to take up a loan from a licensed money lender.
Now that you know all the advantages and disadvantages of choosing money lenders Singapore makes sure you choose the legit one. Always ask for the unique identification number from the money lenders. Make sure you check all the available money lenders and choose the one which offers low-interest rates. Always keep all the documents readily available to speed up the process of the loan application. Read all the documents carefully before you put a signature on it. Make sure to choose the best money lender in Singapore. Never take up loans that do not fulfill your requirements. Think twice before you make a decision. Taking up loans out of stress should be avoided.