Are you short on money and intend to borrow from a money lender in Singapore?
Most people decide to take out bank loans when they don’t have enough money to cover their expenses. However, banks often have a more stringent and complex approval process, which may not be beneficial if you require money quickly. If you need quicker approval, licensed lenders are a good option.
However, is it safe to borrow from a licensed money lender? Or what are their procedures if you don’t return the money on time?
Before you start borrowing money, you should know the factors and reasons to choose the best-licensed money lender in Singapore.
Benefits of Taking Loan From a Licensed Money Lender
We have a few options when it comes to borrowing, including banks, licensed money lenders, and close personal contacts. You should choose licensed lenders over banks if you need a loan for a variety of reasons, including the following:
1. Quick and Simple Cash Loan Process
Money lending can be complicated for applicants who are applying for the first time or have poor credit. As a result, money lenders provide simple and speedy cash loan procedures to enable clients to get a loan that suits their financial needs. It shortens the period of economic uncertainty, enables customers to get loans sooner, and ensures that everyone can find an appropriate financing option.
2. No Harassment by Unlawful Money Lenders
Every registered money lender in Singapore is required to go by a set of guidelines, which are meant to promote fairness and protect customers from abuse. If a lender with a license violates even one of those rules, the borrower can report the lender to the authorities, who will severely penalize the lender.
The lender’s license could also be terminated if the crime is severe. Money lenders who have a license should handle their clients with professionalism.
However, illegal lenders don’t have to abide by the laws, which is why they frequently harass innocent borrowers.
3. Reasonable Interest Rates
It is against the law for licensed lenders to charge high-interest rates. In Singapore, the Ministry of Law verifies legal money lenders and controls the interest rates. To avoid borrowers from getting into debt and having to pay rounds of high-interest rates that never seem to end, a private money lender in Singapore is only allowed to charge a maximum of 4% monthly interest rate.
You also don’t have to worry about finding a money lender with a low-interest rate. Borrowers have the opportunity to compare rates from legitimate money lenders on their terms and benefit from speedy approval and flexible repayment plans, thanks to the market’s competitive prices being available online.
4. Shorter Payment Terms
Although banks typically offer lower rates than licensed money lenders, you also need to take into account the terms of their loans. You will need to make a long-term commitment to paying interest if the payment term is prolonged.
On the other hand, Singapore’s authorized money lenders provide shorter payment terms. It’s noteworthy to keep in mind that you’ll pay off your debt faster if the loan period is shorter. Everyone wants to pay off their debt sooner rather than later, so the idea is appealing.
5. Access to a Range of Loans
Licensed lenders offer a variety of loan plans with diverse terms, in contrast to most illegal lenders who combine their services into one or two loans. The best-licensed lender should offer the following loan categories: education loans, medical loans, business loans, wedding loans, and more.
Customers can obtain various loans for various purposes by categorizing loans in this way. Additionally, depending on the loan’s intended use, you can negotiate lending terms and amounts.
6. No Credit Checks
If banks don’t believe you will repay them, they won’t lend you money. It is unlikely that a bank will lend to you if you have a low credit score. However, a legitimate money lender does not rely heavily on your credit score. They are aware that they can use your securities if something prevents you from repaying the loan.
They calculate the interest rate for your loan based on how much money you borrow, how long it takes you to repay it, and other similar factors. You can obtain an interest rate that works for you because an authorized money lender is not concerned only with the state of your credit history.
7. Safe to Borrow
You must make sure that your personal and financial information is secure while applying for a loan. The only method to guarantee that these particulars are kept confidential is to work with a legitimate money lender. Given that unlicensed money lenders’ business practices are not monitored, working with them puts you at risk for malicious assaults.
8. Transparency in Every Transaction
Loan sharks want to convince you to get a loan from them so that they can charge higher interest and obtain hefty amounts of money. It’s obvious that they do not have any contract or disclose all the loan transaction details. They try to conceal certain facts and take advantage of hidden information later.
It’s not the case with licensed moneylenders. They explain everything that will happen during the entire transaction process. Once you discuss all the loan requirements and submit the documents, a legally-binding loan contract is formed. It defines every little information about your financial exchange with the entity.
You should avoid lenders who are not transparent about how they conduct business as they may harass you later.
Licensed moneylenders in Singapore are safe and reliable entities to borrow money. Stay wary of illegal moneylenders and streamline your loan process quickly.