20 Jul Differences between taking loan from licensed moneylenders and banks
Many people have the wrong perception when it comes taking up loan from moneylenders as they think that they are unlicensed and illegal. Hence, they prefer to take up loans from banks. However, this is a wrong perception as moneylenders that have shop fronts are legal and licensed by the registry of money lenders. The registry requires moneylenders to abide by the moneylenders act and rules which include the lending amount limit and the interest rates charged. Basically, licensed moneylenders are the same as banks who provide loans to individuals and businesses. In addition, in situation of late payment, licensed moneylenders would simply send a reminder notice and are not supposed to harass the borrower which is deem as illegal in the eyes of the law. This is basically the same way how banks work as well. Nonetheless, there are differences on how licensed moneylenders and banks work which we will address below:
- Licensed moneylenders provide smaller loans while banks focus on bigger loan amount
Licensed moneylenders provide small loan amounts, starting from $200 onwards. The legal lending restriction is maximum four times the money the borrower earns. For example, if the borrower earn $30,000 annual income, the moneylender can only give a maximum of $10,000 loan amount. Nonetheless, a lot of the borrowers who go to licensed moneylenders are usually looking to take up small loan amounts in the form of personal loan or pay day loan for various emergency reasons. Such emergencies include medical bills, credit card bills, education fees, renovation bills etc.
- Licensed moneylenders have easier loan approval process as compared to banks
Some customers have bad credit ratings and getting loan from banks can be difficult or at times it can be an instant rejection from banks. However, licensed moneylenders do not just focus on credit ratings. At Swift Credit, we do background check and depending on situation, we will check if the customers have any other outstanding loans elsewhere, After which, we will try our best to customize a loan package that will suit the client’s current financial ability. On the other hand, banks are generally more stringent. A full background check will be conducted and if the client has bad credit rating, it will be an automatic rejection from banks. Therefore, for people who have bad credit rating and require small amount of loan, licensed moneylender is a great solution.
- Getting loan approved by licensed moneylenders is faster than banks
In general, getting loan from licensed moneylenders is quicker than banks. Applying for loan from moneylenders has a simple and straightforward process while banks has long and tedious paperwork procedure. Typically, with the proper documents in place, you will be able to get the loan approved from moneylenders within 30 minutes or less. Once your loan is approved, the loan consultant will contact you and you will be able to get the cash within the next 15 minutes. Hence, all in all, it takes just 45 minutes to get the cash you need from moneylenders. Therefore, borrowers who are in urgent need of cash, approaching licensed moneylenders is a better solution than going to banks.
At Swift Credit, we provide a wide range of loan packages that will suit each client’s specific needs and requirement. Our interest rates are highly competitive and approval process are hassle-free, fast and simple. If you have any queries on our loan packages, you can contact us at +65 6684 4129 or email us at email@example.com.