Sometimes, life catches up with you. You wake up one morning with nowhere to turn to for immediate financial assistance. You need instant cash for something totally unexpected. You can’t borrow from family and friends. You can’t go to a bank because the loans there can’t be approved the instant you need them. Luckily, there are other options for you. If you are in dire need of a personal loan or payday loan, you can go to a pawnshop or a moneylender.
If you didn’t know it before, you should know it now. Pawnbrokers are a licensed financial entity in Singapore. The Ministry of Law states that there are over 220 pawnbrokers, licensed, in Singapore today. Pawnbrokers are a good source of instant cash. As long as you have something valuable for them to hold as security, you can get a loan from them.
Moneylending is also a legal option for you to get a personal loan or a payday loan. Moneylenders are typically associated with loan sharks or’ ah longs’. This is not entirely fair or true. There are over 170 licensed and registered moneylenders in Singapore. You can get secured and unsecured loans from them. They also approve and disburse cash loans instantly.
What You Need To Know About Borrowing Money From A Pawnbroker Or A Moneylender
- Low Interest Rates
There is a lot of competition among pawnshops in Singapore. There are also a lot of licensed pawnbrokers in Singapore. As such, you can get competitive interest rates from them. Some of the most popular pawnshops in Singapore include Value Max and Maxi Cash. You can get loans from as little as 1% interest per month, and sometimes 1.5%.
Moneylenders in Singapore have interest rates that are fixed by the Ministry of Law. No moneylender is to charge interest higher than 4% per month on unsecured loans. So you can find moneylenders who charge even less than that. Plus, the fees they charge you are very little.
- Giving Your Valuables for Loans
Just as banks require collateral, pawnshops require valuables. Expensive jewellery is the most common thing to use. To get a loan from a pawnbroker, you will have to take, for instance, some earrings with you. The pawnbroker will assess the value of those earrings, and give you a loan based on that value. So, if they evaluate your earrings to be worth S$20,000, that is the loan amount you will get. You have a period of 6 months to repay your loan. This 6-month period resets every time your payment is a partial one. Once you default on payments, the pawnbroker sells your earrings to get their money back.
Something to note about pawnbrokers: if they sell your earrings and get more than you owe them, they will give you the extra cash. For instance, you have an outstanding debt of S$15,000. The pawnbroker sells your earrings for S$20,000. The extra S$5,000 will go to you. Usually, you would get more selling those earrings elsewhere. But that is what happens when you go to a pawnshop for business.
Moneylenders can give you unsecured loans. Unsecured loans are those that you can get without any collateral or exchange of valuables. However, the amount you can borrow is limited by your income. You can only borrow as much as your income allows. So, if you earn S$30,000 a year, you can borrow up to 4 months’ salary. If you earn S$120,000 a year, you can borrow any amount you want. Also, with secured loans, you can borrow any amount you want.
Moneylenders also tailor a repayment plan to fit your ability to pay back the loan. Even if you have a bad credit score, moneylenders are willing to work with you so that you can get a loan. If you default on your loan repayments, the moneylender will take you to court.
- Loan Approval And Disbursement
Pawnbrokers differ from moneylenders and banks in one major way. They do not require any form of documentation to give you a loan. All they need is an item of value from you, and you get your cash once the value of that item has been ascertained. If you want an instant cash option, pawnbrokers are the place to go.
While moneylenders require some documentation, their loan process is faster than that of banks. You can contact a licensed moneylender via their website, and after a phone call, you can get your cash. Loan approval and disbursement can happen in less than an hour with moneylenders.
Since their activities are strictly monitored by the government, they need to see some documentation. You also need to read their terms and conditions. They need to know that you understand everything before they can give you a loan. Any moneylender who doesn’t do this is most likely a fake moneylender.
Getting A Loan From Pawnshops
Personal loans are considered to be unsecured loans. As such, banks will give you a personal loan without collateral. Pawnshops must have collateral for every loan you want, regardless of the type of loan. If you have bad credit, or none of the necessary documents to borrow from a bank, then pawnbrokers are your best bet. Just be willing to give up your heirloom necklace, and be certain that you can repay in 6 months to get it back.
Getting a Personal Loan/Payday Loan from Moneylenders
A moneylender will always give a personal loan for an unsecured loan. You can also get a payday loan as an unsecured loan. While the interest rate is fixed at 4% per month, you can compare rates and settle for one that has less. Even if you have bad credit, licensed moneylenders are willing to help you get a loan. They do require documentation, but their loan approval process is faster than banks. In less than two hours you can get your cash and settle your financial problems. Just make sure that you visit a licensed moneylender if you want to get a loan.