Should You Borrow Money From The Bank Or Licensed Money Lenders?
Bank often lends money to people who are financially stable. Thus, yielding some Singaporeans to borrow money from Licensed Money Lenders. But where should you borrow? First, you need to understand how they work and their characteristics. Afterward, decide where and what type of loan you should get.
Bank loans guarantees that there would be future repayment of the principal amount and its interest. A loan can either be specific or open-ended credit up to a certain ceiling amount.
Banks are ideal for larger loans to use for house renovation, business capital, or buying a car. When it comes to Credit Assessment, banks consider a good credit score with a low debt to credit ratio to qualify for a loan. And, if you want to pay a low interest rate, you need to be vigilant about your credit score.
Licensed Money Lenders are businesses regulated by Singapore’s Law. Loan sharks lend with high interest rate but licensed money lenders’ are controlled by the parameters of the Law, which means you can expect to have a fair deal.
Do you need money to pay your utility bills, to get your laptop fixed or for a car repair amounting to $1,500?Consider borrowing from licensed money lenders, and they’re ideal for smaller loans.
Licensed money lenders give more leeway in the credit score when it comes to Credit Assessment. This is because they lend a significantly smaller amount of money. So, if you have bad credit and you cannot get a personal loan, licensed money lenders are there for you. Although they give more freedom in the credit score, they will reject your application if you have a large sum credit card debt or if you have an outstanding loan from another money lender.
When it comes to the speed of transaction, licensed money lenders approve the borrower’s application within the day you submitted the form. However, they have a higher interest rate because they carry more risk for granting a loan to people with poor credit rating.