Right from education to vacation, from wedding to traveling, there are so many different reasons why people choose to borrow a loan. An emergency is also one such reason. But when you have a financial emergency, such as a sudden hospitalization or a loss of job, you might be desperate to arrange the money for fulfilling your needs. And it is exactly at such times that you need to be extra careful and vigilant about who you are borrowing from and under what terms and conditions.
Choosing a legal moneylender to borrow a legal loan in Singapore can make your life simpler. Some of the best loans are offered by these licensed moneylenders and that too, at extremely affordable interest rates and flexible repayment terms. Let’s find out more.
The Benefits of Getting a Legal Loan in Singapore from a Legal Moneylender
There are many reasons why moneylenders are known to offer you the best loans, suitable for whatever needs you may have. Learn more about some key benefits here:
A legal moneylender has many advantages over banks.
Many loan providers are reliable and authentic, such as banks. But getting a legal loan in Singapore from a legal moneylender beats the traditional finance institutions when it comes to convenience and consideration.
- A loan amount that suits your needs.
You can borrow smaller amounts of loan from licensed moneylenders. But banks usually prefer to loan higher amounts. So, whether you need to go on a short trip, or buy a new apartment, moneylenders will have more loan options for you as compared to the banks.
- The cap on rate of interest helps to keep it fixed.
Government-approved moneylenders have to follow a fixed rate of interest, that is upto 4 percent per month, irrespective of the borrower’s income. Even the nature of the loan – secured or unsecured, does not impact this fixed rate of interest. As opposed to this, banks offer fluctuating interest rates. And if you have multiple loans then this can negatively impact your financial planning.
- Loan application and approval is uncomplicated.
When borrowing from a legal moneylender, the loan application process is easy and convenient. Approvals are quick, so much so, that you can even get a loan in one hour. But for this ideal scenario, your documents should be perfect. Banks follow stringent and stricter guidelines for loan approvals. So, the approval time also gets affected. When you are in an emergency situation, moneylenders are a better choice to borrow a loan.
- A considerate late payment policy that puts you first.
Private moneylenders show more consideration in case of defaulters. Again, they are not allowed to charge more than 4 percent penalty every month for a delayed payment. Further, they may even support you with financial counselling and negotiate better plans to repay the loan. That also helps in maintaining your credit score to its best possible. With banks, this kind of levee may not be possible as they have stricter rules and guidelines.
- Moneylenders do not charge a termination fee.
Legal moneylenders allow you to repay the full loan before the term completion. No termination fee is charged under such circumstances.
A legal moneylender is reliable as compared to moneylenders who don’t have a license.
- You never know what other businesses an unrecognized moneylender is running. So, sharing all your personal details to obtain a loan from these people can be putting you at a high risk.
- Unlicensed moneylenders are not bound by the maximum 4 percent interest cap. So, they could charge exorbitant interest rates. Their terms and conditions could be steep too.
- Moneylenders who are not recognized by the government might resort to harassment in case of defaulters. Legal moneylenders would never practise such ways and means, but instead, they often respond with compassion and consideration.
- Spamming is another harassment that you might face when you leave your personal data with an unlicensed moneylender. On the other hand, legal moneylenders are not allowed to advertise via sms or other such ways.
As a borrower, you could consider these few things when you approach a legal moneylender for a legal loan in Singapore.
- How much money do you exactly need? And for what duration?
- What is your credit score?
- Which legal moneylender offers the best loans?
- Do you have all the information you need to be able to make a decision?
Although licensed moneylenders will help you with great planning, it is always nice to know where you stand and conduct good research. Once you are equipped with these, borrowing a loan becomes easy and risk-free.