Is Borrowing From a Money Lender a Good Idea

Is Borrowing From a Money Lender a Good Idea

is-borrowing-from-a-money-lender-a-good-idea

One common question borrowers usually ask is whether borrowing money from a lender is a good idea or not.

The answer to this question depends on your personal situation. We’ve listed most common situations and then explained if taking a hard cash loan from a lender is the right thing to do in that situation or not.

You’ve good credit report and can get a personal loan from your bank

Well, in this situation there’s not much sense in approaching a licensed money lender—and the reason is not hard to fathom. Money lenders charge a greater interest rate compared to banks, and so taking a loan from them is more expensive.

You can get a personal loan from your bank but you need a small loan immediately or by latest tomorrow

Banks take their own sweet time to approve a loan application, irrespective of the borrowed amount. If you want a loan for an emergency situation, banks can’t help you. In such a scenario, it is much better to approach a moneylender who’s licensed. Such lenders can give you the requested loan within an hour of submission of requested documents, especially if the loan amount is not huge compared to the borrower’s annual salary.

You can’t get a loan from your bank because of bad credit report

Ah, in this case, there is no other option for you. Unless you have a friend or a family member who’s willing to lend you the required amount, you will have to approach a lender. Before you do that, you must remember a few things. First, lenders charge more interest rate than banks. Two, you must borrow only what you can repay, Three, always ask the lender to explain the terms of loan contract in the language that you understand. Four, always ask for a copy of loan contract from the lender.

You need a payday loan

Banks don’t offer payday loans, but money lenders do. If you need a payday loan, you have no other option than approaching a money lender.

You have only two options available to you: money lender who are licensed and loan sharks

Well, let’s say because of certain reasons, you can’t take a loan from a bank. Credit card loans are most expensive, and you certainly don’t want to go down that road. You have two options in front of you: legal lender from Singapore or a loan shark. Well, in such a case, you should always approach only those lenders who are licensed. These money lenders are governed by certain rules and have to follow certain regulations. You can be assured of receiving a certain level of service when you approach a lender who’s licensed. Moreover, in the case of a dispute, you can approach relevant authorities and have your case heard. In the case of loan sharks, you are absolutely at their mercy. There’s no quality control and there’s no one to whom you can approach in case there’s a dispute. That’s why you should never take a loan from a loan shark.

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