Time and again, banks roll out newer and more efficient loan plans, EMI plans and other schemes that let people borrow money with efficient interest rates. Under any financial difficulties, individual turns to banks for assistance. But when in urgent need, it becomes extremely difficult to get the money. Banks take their potential borrowers through thorough back ground checks, credit check, etc. These take time and might also end up to rejection of the borrower in case the scores do not match the terms and conditions laid down by the banks. Sometimes, people with lower income and lower cashflows cannot even get the lowest of amounts from banks, even during the direst of needs. These are the situations that can be tackled with the help of money lenders. Although, a lot of hostility has been seen towards money lenders throughout the history, not always by leftists, they are a great boon to the society, for humanity.
How are money lenders different from banks?
Money lenders are people or groups that lend money at interest rates set by themselves to people during financial needs. The major differences lie in terms of the speed, the interest rates, the amounts granted, less thoroughness during assessment of an individual. Legal money lenders are granted license by the central government of their countries and allowed to work on the terms and rules laid by the government. Licensed money lenders are similar to banks and are not allowed to harass people or abuse them when the loans are not returned on time, rather they are allowed to send in reminders and make their claims accordingly.
Are money lenders faster than banks, how?
Money lenders are definitely much faster than banks in granting loans. This is because most money lenders are not as apprehensive of the credit scores and outstanding loans of an individual as the banks are. Thus, they go light on the background checks and sometimes do not even conduct any. Even if they do conduct background checks, they are not as through as the banks are.
Another important reason behind the speed and less apprehension is the fact that money lenders focus on lending smaller loans as opposed to the banks that lets one borrow as much as they require based on the credit score and other checks of the individual.
Are the interest rates of money lenders higher than banks?
The interest rates of legal or licensed money lenders are higher as compared to that of banks. But, it only makes sense that they charge higher rates of interest at the cost of less thorough background and credit check. The interest rates vary from country to country, and also varies from one type of loan to another. Secured loans, in general, are charged lesser interests as compared to unsecured loans. For example, in some countries. Secured Loans are charged at 13% Effective Interest Rates while the unsecured ones are charged at as high as 20%. Singapore has a great environment for money lenders who see a lot of inflow of borrowers every day. One such company is SE Investment: Licensed Money Lender in Singapore Jurong.
In that case, when interests are higher, why can people not borrow from their friends and relatives?
Borrowing money from friends and family often, tends to strain the relationships. It is thus very much advisable to not conduct this barter within the relations. Thus, borrowing from a third party is always a better solution.
What other benefits do the money lenders offer?
Money lenders offer various benefits to its borrowers in addition to the lesser need to have a good credit score for being able to claim a loan in their names and quicker access to cash. Few such benefits offered by SE Investment: Licensed Money Lender in Singapore Jurong are Debt Consolidation, Credibility Maintenance, Top Notch Customer Service, No Risk of Penalty Cancellation etc.
What is Debt Consolidation?
Debt Consolidation essentially means combining all the debts into one debt. Breaking it down, it means that a debtor can borrow some money to pay all the debts and thereby remain with only one debt to pay off. Usually, this is done when the interest rates and other factors combined of this one debt are more favorable as compared to all the debts combined. Although there are various options banks provide for debt consolidation, like Credit consolidation, or Home Equity Lines of Credit, etc., borrowing money from an external money lender to pay off debts is a great option to consider, provided the conditions are more favorable for one’s situation.
What is Credibility Maintenance?
This means not having to borrow from friends and family and thereby saving all the post strain effects in the relationships. Borrowing money from the external third-party money lenders is therefore a great option to consider. SE Investment: Licensed Money Lender in Singapore Jurong is one such company based in Singapore that offers immense credibility maintenances.
What is Penalty Cancellation?
Usually when one approaches a bank for loans, they register the borrower after thorough background check and credit score check. If after being registered for the loan, the borrower decides not to take it, or to cancel it, for he/she does not need the money anymore, the borrowers are charged with penalty and are blacklisted for later loans. While, third party legal money lenders like SE Investment: Licensed Money Lender in Singapore Jurong, usually have a no penalty cancellation policy wherein the borrower is not charged for cancelling the loan process and is allowed to borrow money at later stages without having to face prejudice of any sort.
However, even after all these benefits, there are somethings to be kept in mind before borrowing money from the third-party lenders.
- Make sure that the money lender is licensed. Ask questions and ensure the lender is right for your requirements.
- Thoroughly analyze other options before opting for third party lenders.
- If the money lender is abusive and aggressive in his/her first few meets, notwithstanding they are licensed or not, do not hesitate to get away from there.
- Have a full-fledged understanding of secured and unsecured loans before claiming one.
- Read through the terms and conditions properly, before registering yourself for the loans.
In conclusion, licensed money lenders are a great choice for people that cannot afford extreme amounts of time, background checks, high cashflows, etc., with various benefits, only at the cost of slightly higher interest rates.