Cost Cutting Tips21/04/2016
Most of us have experienced a situation where we need to fulfill a financial needs quickly,?and are not sure about the avenues available to us. While Banks are the most common?choice to gain a loan, Money lender has become increasingly a viable avenue that?complement the bank?s offering. In this article, we would like to provide you with?information on how Banks and Money lender complement each other, and gives you the?overlook on which might fits your needs better.
- Speed of Service
Bank requires more time to process a loan request, especially since they are?very stringent in finding out the background of the borrower. While many banks?increasingly provides personal loan with shorter waiting time, a borrower will be?able to get the same loan approved below one hour through a licensed money?lender.?Because a bank also provides many other services, you might encounter a long?queue, thus delaying the process even further.
- Size of Loan
Because of the stringent process, bank are often able to loan a bigger sum of?amount. A licensed money lenders will be more conservative in lending credit to?customer. As such money lender is perfect for smaller size of loan that customer?needs just to tide over an emergency event.
- Interest Rates
Bank tends to provide better interest rate for the borrower compared to licensed?moneylenders. However this is due to the higher credit standards that bank has?in place to reduce their risk. Licensed moneylenders offers more flexibility in term?of requirement thus this is reflected in the interest rate.
Do note that licensed moneylenders in Singapore are regulated by the Registry?of Moneylenders, and can only charge a maximum interest rate of 4% monthly.
Banks will assess a loan based on the individual?s credit history, thus people with?less than perfect credit history will have harder time in getting their loan?approved. Licensed money lenders tend to be more tolerant when assessing?each loan application. However, do note that licensed moneylenders have the?right to do background checks when needed as well.
As such, for some people (borrowing large amount, not an emergency needs, and with?good credit history) bank could be the right choice. For others, a licensed moneylenders?is a good alternative for small and fast credit.?Feel free to contact us to understand more about our services, and how we can assist?you further.