Moneylenders are those organizations who lend money to the people based on their eligibility. Some money lenders charge a high rate of interest because of the risk of losing the money. Moneylenders make a huge amount of amount of money by way of charging interest. The money lending business has been increasing every day in Singapore. On the contrary, banks also offer you loans by way of collateral security. If you borrow money from money lenders and your payments are late, then they won’t harass you. They will simply just send you a reminder. If you borrow money from banks and you make the payments late, your collateral security might be sealed.
Difference between money lenders and banks
There are a lot of differences between licensed moneylenders and banks in Singapore. They are:
- Amount of loan– licensed money lenders are the perfect choice if you are looking for a small amount of loan for a short period. Money Lender Singapore allows you to pay the loan amount at your specified time. Whereas, banks are the best choice if you are looking for a large amount of loans for a longer period. This is because banks allow you to pay the loan over a longer period by charging you a small amount of interest.
- Interest– Money lenders charge a large amount of interest as compared to banks. They do so because there is a probability of not receiving back the money. Although, money lenders don’t ask for any collateral as a security deposit. They just require you to show your salary and payment slip. Thus there is an added risk while providing money to the people. Banks charge a small amount of interest because it allows you the pay the loan over a longer period. Banks also ask for collateral as a security deposit.
- Speed– Faithful Money lender Singapore like Lender Singapore provides you with the money instantly. Once you have all the documents, they can immediately just provide you with the loan amount. This is the best thing about choosing money lenders in Singapore. There isn’t any paperwork required in this case. On the contrary, banks will provide you with the loan amount quite late. It is because of the amount of paperwork that is required to be done. Also, people who don’t have any bank account or any to show as collateral security to the banks, opt for going through money lenders Singapore for money. It is easier to get the work done on time. If you miss out on even a single document, then there is a high chance of your request for money through banks being disapproved. Moneylenders can provide you with the money within a couple of days at the most whereas banks might provide you the money in a couple of weeks. Banks need to check your credibility or credit score, your account history, and all other details. Banks also check your background for loan approval.
- Credit Score– Credit score determines your credibility on repaying the amount on time. Having a good credit score will make it easier for you to get money through banks. Moneylenders like Lender Singapore don’t require a credit score. This is another big advantage of choosing money lenders. Even if you have the worst credit score, you are likely going to get approved. On the other hand, if your credit score is between AA to CC, then your loan is likely to be approved. But, if the credit score is below CC then the chances of your loan approval becomes even less.
- Access to information– banks will provide you with all the details regarding the applied and effective interest rates online. They won’t hesitate in showing you the details. On the contrary, money lenders Singapore will hesitate in providing you with all the details.
- Technological Advancement– Technology has played a major role in the lending process In Singapore. Banks have been the sole lenders for money in recent times. This makes it difficult for small venture businesses to borrow money. This is where money lenders became even more useful. They provided the small ventures with the loan they required by charging high rates of interest.
There are banks and money lenders that are ready to provide you with the money you want (provided you have all the documents required). Now, it lies upon, you from where do you want to borrow money from. Many people would opt for taking out money from their credit cards. But there is a risk of failing to repay the amount would lead to high-interest rates being charged and bad credit ratings. Moneylenders charge a high rate of interest but are an equally safe method of providing you a loan. While applying for loans through banks, check the interest rates being charged by other banks. Always compare and choose. Read all the terms and conditions carefully. Choose the first one that suits your requirements.