Getting a loan from a bank can be a difficult thing due to the much paperwork involved. Banks will check your credit score before approving the loan. Additionally, they do not take into account your monthly earnings when considering your loan application. If you live in Singapore, you can consider borrowing from legal money lenders Singapore.
These lenders are licensed by the Registry of Lenders that binds them to do business as per money lender regulations. The registry decides the lending amount limit, the interest, and fees a lender can charge. So the question is if money lenders a suitable alternative to bank loans. Before drawing a conclusion, let’s check some facts.
If your loan requirement is few thousand Singapore dollars, licensed money lenders can help. According to the lending restriction, a legal money lender can offer you a loan up to four times of your annual earning. However, some money lenders will not lend loans up to the full amount.
They might approve a loan amount of $10,000 if your earning is around $30,000. If you are looking for smaller payday loans for getting your car fixed, buying a budget plane ticket or some lesser need, approaching a legal money lender is a good option.
If you require a large amount of loan for renovation of your house, borrowing from a money lender is not a good choice. In most cases, money lenders will not risk lending significant amounts such as $20,000 or more due to risks involved.
Unlike banks, money lenders are quick in processing loan applications. If you are carrying the necessary documents with you, the loan should be approved by the money lender within 30 minutes or less. It might not even take more than 45 minutes to get the cash in hand after you application and documents were submitted to the money lender.
This is a downside of borrowing from money lenders. Though they are still acting as per registry rules, the interest rates charged by money lender are higher than what is charged by the banks.
If you have a bad credit score, your bank might not give you a loan, but the majority of money lender might still do so. In fact, some money lenders give less importance to a credit score in comparison to banks and they usually never reject a loan to an individual due to poor credit score. As it may take the time to fix your poor credit score, borrowing from a legal money lender may be your best option if you need money urgently.
However, money lenders may reject your loan application if they find out that you have already taken loans from other money lenders.