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Licensed Moneylender or Bank: Where to Borrow Money For Business
Do you need money now and cannot decide whether to go to the bank or licensed moneylender in Singapore? Before you take action, you have to study the difference between the two financial institutions carefully. They can both help you but get the money you need, but each has their risk factors you need to consider.
If you choose bank loans, surely you’ll have to pay for the principal amount plus the interest. Among the benefits of a loan from banks are:
- Flexible repayment terms- When it comes to borrowing money from the bank, the only thing that you should be pressured about is paying on time. Plus, rarely banks monitor where you spent the money on as long as you stick to the deadlines.
- Higher amount of loans- Banks have more capital so they can offer you a higher loan amount best for buying a new house, car, or starting a business.
- Lower interest- Relatively, banks give the lowest interest compared to credit cards or overdrafts.
On the other hand, the disadvantages of choosing a bank for financial assistance are:
- Stringent qualifications- Banks not only have a long list of documents you need to submit, but they will also look thoroughly at your credit rating. They also ask for collaterals, so if you fail to pay, they can take your assets like your house.
- Repayment pressure- Banks are powerful financial institutions so imagine the burden you’ll have if you are not able to return the money you owe them. Even if you manage to repay but late, they will report you to the Credit Bureau Singapore, and it will negatively impact your credit score.
- Changing payment amounts- Loans from banks can have low interest, but they have variables. It means when the market changes, your payment can be higher or lower too unlike the fixed interest rate.
Licensed Moneylender Loans – https://www.licensedmoneylender.loan/
Licensed money lenders are financial companies under the control of Singapore’s Law. Since the law regulates licensed moneylender, you can be assured that your loans are secured and legal. Here are its perks:
- Fast loan approval- Unlike banks, licensed money lenders are more lenient with the requirements and shorter process. You can get approved within the day and have your money in a day or two.
- Credit score consideration- Licensed moneylenders, are more gracious when it comes to your credit score. This is because they usually loan smaller amount of money.
- Flexible plan of repayment- Licensed money lender Singapore offer a more flexible repayment contract so you would not have that much pressure and stress when paying.
Just like the bank, licensed moneylender also has its profile of risks:
- Higher interest rate- Since they grant loans even if they have a low credit score, they put a higher interest rate to balance the risk of the person not paying back. They also apply other additional fees like late penalties.
- Small amount of loans- They give a lesser amount and short-term loans because their capital is not as big as that of established banks. So if you need a car or house loan, licensed moneylenders cannot help you.
So have you made up your mind yet on whether you go for a bank or licensed moneylender? Share your thoughts with us.
Remember to check on the reviews on money lenders before getting a loan with moneylneder on https://www.moneylenderreview.com/best-licensed-money-lender-singapore/