Everyone has had moments of financial difficulty at some point in his or her life.
Whether the cause of money woes include mounting debts due to health problems or your car breaking down, a loan can bridge the gap until your finances are steady once more.
Yet you might be reluctant to go to a bank to get this loan if you’ve been denied before. There is a solution, however, and that solution is to consider licensed moneylenders.
What is a licensed moneylender?
They’re a financial entity that has been authorized to provide loans to people. The advantage to using licensed moneylenders is that they can provide personal loans that can be repaid over a course of time, thereby reducing the amount the borrower has to pay each month. Moneylenders are a great source of loans at short notice and are a godsend for people who do not have a conventional bank account. Banks can deny someone a loan or even deny them setting up a bank account so people in that situation are in great need of licensed moneylenders.
The loans offered from moneylenders include payday loans, business loans, personal loans, foreigner loans, and private property loans. The most popular type of loan is the payday loan because borrowers have unexpected expenses that need paid before they receive their next check. It’s a common situation for a lot of people to fall into and so licensed moneylenders can provide that service. Licensed moneylenders also like payday loans because they know they’ll get their money back fairly quickly, at least most of the time. A payday loan can bridge the gap until pay day when calamities befall a person, like cars breaking down or a hefty hospital bill arriving in the mail.
Related Read: A Closer Look On Payday Loan
Why should you choose a licensed moneylender over a bank?
First of all, banks have low approval rates when it comes to loans of any kind, so it’s hard for most people to have much success getting a loan there. It’s even worse when you don’t have the greatest credit rating or a spotty professional history (like being self-employed). Banks almost always loan you money when you really don’t need it! It’s financially difficult for anyone else in need of funds if the bank is that stringent about lending money. A licensed moneylender will be much more flexible and allow people in a variety of different situations to ask for a loan.
A licensed moneylender is a great option for a quick but fairly low loan. They’re also really flexible in responding to loan requests, and once the proper paperwork is submitted, they can loan the money in no time. Companies like this can really work with people who may have poor credit too. There are exceptions of course like people who have high credit card debt, have other loans with other moneylenders, or who have declared bankruptcy.
Payday lenders are much more lenient, but they also understand the risk in loaning money to people who the bank may have denied loans. Many people who come to licensed moneylenders have poor credit or high credit card debt. This is part of the reason why moneylenders keep their interest rates so high but most localities have restrictions in place for the amount of interest that can be charged. The key in all of this is performing the proper research before heading out to get a loan from any lender.
Here are a few things to keep in mind when seeking out a licensed moneylender:
- Make sure the financial lender you’ve chosen is licensed and dependable. Though it might be easy to not do your research when you’re in a bind for money, unlicensed lenders can prey on the unsuspected, and a loan can quickly become a nightmare when the unlicensed moneylender harasses you for payment. Licensed moneylenders cannot harass you and must work within the laws of the country the lender is based in. Most regions or countries should have a centralized list of licensed moneylenders for you to reference.
- There will be regulations in place to protect the consumer that puts a cap on what moneylenders might charge. It can be difficult to get a license, so most licensed moneylenders do their best to work within the law. A reputable moneylender will be more than happy to show you their license, so avoid any lender who is cagey about doing that. Information about the loan terms should not be withheld.
- Be sure to ask any questions before signing the loan contract, such as how long the licensed moneylender has been open for business. You’re legally obligated to hold up your end of the contract as stated in the paperwork for your loan. Licensed moneylenders should be able to explain the details of the loan in a way that you can understand what you’re signing on to.
- As with any purchase you may make, shop around for the best terms for your loan. Be completely satisfied with the loan terms and the rate you’re being charged before you commit to a moneylender. If they refuse to provide the terms of the loan in writing, that should be a major red flag, warning you to find another moneylender. (You may also be able to report any licensed moneylender who refuses to provide the paperwork for the loan.)
Related Read: Licensed Money Lender Vs Bank
Getting money quick because of unexpected expenses or debts is much easier when you use a licensed moneylender. While the interest rates may be high, there is a higher probability that someone can get a loan via a moneylender where they couldn’t with a conventional bank. It’s the perfect solution to needing money in an emergency when payday is still days away. So long as you know what you need and practice diligence in picking a lender, securing your loan through a licensed moneylender is ideal.