Bank or Licensed Money Lenders – Where Should You Borrow Money From?

The crazy fact about lending money from the banks is that they never lend money to needy people. They always lend money to the people that are stable enough to pay back the borrowed money. That’s why the licensed moneylenders are getting more popular in today’s world. Understanding the difference between these institutes is essential before you borrow money from them.

Banks

When it comes to borrowing money from a bank, you’re supposed to pay it back within a specific period along with interest. The banks offer different packages that one can use for borrowing the money.

Characteristics

1. Larger Loans – If you need larger loans like buying a car, starting a business, or renovating your home, then banks are the ideal option for you.

2. Credit Assessment – If you want to qualify for a loan, you must have a low debt to credit ratio with a good credit score. And you must also be vigilant about your credit score if you want to pay a low-interest rate.

Licensed Money Lenders

Singapore’s Law regulates the licensed money lenders. There are certain parameters of law that control the fees of licensed money lenders due to which they cannot charge high-interest rates. It means you can easily find a fair deal when borrowing money from these lenders.

Characteristics

1. Smaller Loans – If you need smaller loans like repairing your car, getting your laptop fixed, or paying utility bills, then Licensed money lenders can be the ideal option for you.

2. Credit Assessment – The licensed money lenders in MoneylenderReview.com lend a significantly smaller amount that’s why they offer more flexibility in credit score as compared to the banks. So, you can always take help from the licensed money lenders if you couldn’t get a personal loan due to bad credit.

3. Transaction speed – The most exciting thing about licensed money lenders is that they approve your application instantly as compared to the banks.

4. Higher Interest Rate – The licensed money lenders may charge a higher interest rate and late fees because they usually grant the loan to the people that have a terrible credit rating.

There is no doubt that you can get your application approved by license money lenders even if you have a bad credit score. However, they may reject your application if you have an outstanding loan from another lender or if you have a large sum of credit card debt.

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