Financial matters usually can be handled by your monthly salary, however, unpredicted circumstances might possibly arise and call for a financial assistance. In response to this, Singapore offers abundant numbers of financial institutions that aid the monetary setback.
To classify these financial agencies, you can choose between two secured lenders: the best money lender in singapore and the bank. These two have major differences in rules, dealings and more. To help you clarify your doubts and pick the most suitable choice, here are some differences between licensed moneylenders and banks.
Moneylenders’ Emphasis On Smaller Loan
Keep in mind that borrowing a large amount is not a piece of cake. You need to ensure moneylenders that you are capable of paying the loan in the allotted time given. Since they do not ask for any collateral, just your proof of employment and salary, moneylenders only grant smaller amounts.
In every $30,000 annual income of a borrower, the maximum loan offer given is $10,000. Although the legal moneylending restrictions are to offer two to four times of the borrower’s annual income, the risks are too high as there is nothing to fall back on if you default on your repayments.
Borrowers wanted to have a smaller deduction from their monthly pay. Thus, giving them a full $120,000 as what is in the legal restrictions will give them a hard time paying it monthly and might lower their credit ratings as well.
If you need money for rent, fixing a car, buying new equipment and the like, the best option is the moneylenders. However, if you need a big cash for a housing loan, renovation and any major purchases, the bank is your best deal.
Loan Processing Speed
Money lenders are fast-paced people or institutions. Since they only consent smaller amount of loan, they only ask for minimal documents. If you got all your documents ready, then the procedures are pretty straightforward. Proper documents will be handed to them to start the entire process and serve you in 30 minutes. After the 30 minutes verification and process, you will have an additional 10-15 minutes to get your cash and recheck the loan amount. And, you’re done.
Unlike banks, they need to collect more documents and to verify it more than once. They also need to do a background check in order to approve your loan.
Higher Interest Charge
This is considered as the negative aspect of moneylenders – their interest rates. Along with the fast service of licensed lenders is a higher interest rate charge for your loan.
Faster, Easier, and Forgiving
Most Singaporeans would resort to overspending or take a loan out from their credit cards but remember that there is a risk of doing that. Failure to pay it on time will lead it to high-interest rate and a destroyed credit rating, a subject for next loan disapproval.
Making the right choice of who to borrow from is never an easy feat, comparison of interest rates, ease of repayment, terms and conditions will set both parties apart. Choose wisely on the one that serves your needs the most and use our website to locate the most suitable moneylender for you.
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