Borrowing money is, in general, risky.
Sometimes, Singapore licensed moneylenders get a bad reputation, because of the way they lend money and the methods they use to collect debts.
The truth is, however, that, especially with new regulations, those who are short on cash, can safely borrow money from these lenders. There are risks involved, yes. But there are also plenty of benefits that come along with borrowing from these sorts of lenders.
The Risks of Singapore Licensed Moneylenders
If someone needs money, they will find it somehow. In some instances, they may take a shady loan from an unscrupulous lender. This is the riskiest type of loan that someone can obtain. Borrowing from a licensed moneylender eliminates the danger of working with an unscrupulous lender, but it does not eliminate all the risks that come along with borrowing money.
For example, these lenders often give money to those who have overextended their monthly earnings. These individuals are often not qualified for bank loans, because of a lack of assets or a poor financial history. In order to be willing to lend to those in this situation, a Singapore licensed moneylender has to offer a personal loan with much stricter terms and a much higher interest rate. This makes the loan more difficult to pay back for those who borrow irresponsibly, and therefore riskier for some borrowers.
The Benefits of Singapore Licensed Moneylenders
While working with a licensed moneylender in Singapore might seem far riskier than borrowing from a standard bank, the truth is that there are quite a few benefits that one of these moneylenders can offer than no bank is able to offer. These benefits include a much faster turnaround time. When applying for a loan from a traditional bank, a borrower might have to wait weeks before being approved or denied. Loan applications made to a Singapore licensed moneylender are often approved in less than a day. For those in a tight spot, getting money right now, instead of in a few weeks’ time is a major benefit.
Other benefits include being able to get a smaller payday loan, even with a poor financial history. Many banks will not offer small loans to help cover smaller expenses and they have very strict regulations when it comes to who they will loan to. Licensed moneylenders, on the other hand, have options to provide even very small loans and have much more flexible application standards.