Pages Navigation Menu

Professional Business Advisor

Licensed vs. Un-Licensed Money Lenders

Posted by on May 11, 2017 in Money Matters | Comments Off on Licensed vs. Un-Licensed Money Lenders

Member Login

Other than banks there are two main types of money lenders, un-licensed lenders and licensed lenders both of which can facilitate you getting a loan easier and quicker than you could at a bank. Money lenders do however charge more interest than banks but in the case of licensed money lenders, the interest rate may not be that much higher than a bank’s whilst the rates an un-licensed lender charges certainly will be. Even though Singapore is a relatively small but wealthy country, money lenders in Singapore fall under the same categories as other, larger countries perhaps with one difference though. In Singapore, to ensure that people do not inadvertently go to an un-licensed lender instead of a licensed lender, they have a website that lists all of the licensed lenders.

This is of great help as it stops people from unintentionally ending up having to pay extremely high interest rates on a loan which they needed. Banks are of course generally considered the best place to get a loan from and with good reason; their interest rates will certainly be the lowest however, qualifying for a loan from a bank is not always that easy whilst getting one approved by other lenders is far easier. Also other lenders will usually give borrower cash on the same day as they ask for it whilst the process of having a loan approved and processed by a bank can take several days and usually does. Although all three types of lenders will have criteria which must be met in order to get a loan, a bank’s criteria will always be more strict whilst an un-licensed lender’s will be almost none existent.

Knowing all of this you may wonder as to why people use un-licensed lenders but there are two main reasons why they do. First someone may inadvertently use an un-licensed lender, not knowing they were un-licensed and that is what Singapore is trying to avoid by providing a website listing the licensed lenders. The second reason people use un-licensed lenders is because they may not qualify for a loan even with a licensed lender’s less strict criteria, let alone a bank strict one. In these instances a borrower is left with little choice than to go to the un-licensed lender if they really need the money but in these instances, the borrower should really be desperate as they will end up paying far more than what they borrowed and often have to get an additional loan just to pay off the original one.

So, knowing if a money lender is licensed or not, is very important if you do not qualify for a loan from a bank or, need the money in too much of a hurry to go to a bank. For this reason, all other countries should follow the example set by Singapore and provide a website listing all licensed money lenders to ensure that those people that do pay high interest rates, are aware they will have to before applying for the loan.

Read More
scriptsell.neteDataStyle - Best Wordpress Services