Differences Between Banks And Licensed Moneylenders
Accredited moneylenders are similar to banks. They grant loans to people who have real financial needs. However, when the repayments are late, the licensed moneylender does not harass their clients. They usually will just send notice reminders. Thus they use the same lawful methods used by banks.
Other than collecting money and debts, banks and licensed moneylenders function in different ways. These differences are the speed; forgiving credit assessments, higher rates, and focus on smaller loans.
Having the right documents, moneylender’s approval time is about 30 minutes. That is the whole process from assessment to getting your cash. It generally won’t take over 45 minutes.
Since they run fewer credit checks, it’s easier for them to approve the loan in lesser time than the banks. It is one way legal moneylenders can assist when banks can’t. When you aren’t able to get a loan or credit card from banks, the moneylenders will be your best option.
Forgiving Credit Assessment
When your credit is low, other issues come up. Or you miss some payments. It may be hard to turn it around within a short time. With banks, it means an instant rejection. More so, when you have a poor credit score.
However, moneylenders don’t focus much on credit rating. This is because they lend much smaller amounts in comparison. Moneylenders are alot more lenient. But some moneylenders may do some background checks. If you have other payments or outstanding loans elsewhere, lenders might deny borrowers a loan. That is irrespective of how small the amount is.
Many lenders offer higher interests as compared to banks. The decision and figures on these interests seem absolute. Even credit cards may be cheaper compared to the rates charged by moneylenders. Thus, you could consider getting approved for credit cards from banks. Even then, do shop around to find the right licensed moneylender.
Focus On Smaller Loans
Legal moneylenders offer smaller loan amounts even when you earn over $30,000 salary. The amount offered as loan could total $10,000. Equal to four times your monthly wages are legally allowed in lending.
However, please note that some moneylenders don’t lend the whole amount. When you need small personal loans, such as for, fixing your car, or even paying the rent, a moneylender in Singapore is the best option. But when you need a huge amount of money to tide over a few months to a year. Moneylenders may not be the solution.
One thing for you to remember though, loan approval is that provided you can show you have a decent salary. It is possible that moneylenders may still offer you a loan if your salary is low. Of which with the banks, they might not get approval, when they require mortgages.
When compared to moneylenders, banks will require a minimum credit score. This even when you have a proof of a steady income. They need the credit scores for them to approve any borrower. For this reason, the moneylender may be a good option. Especially for those individuals who may not have a healthy credit rating, yet they need to take out quick cash for various reasons.
So don’t be too quick to strike off the option of approaching a moneylender. It might be the only option you can turn to.