Have you ever faced a financial crisis in life? If yes, the first thing that comes to your mind is taking a bank loan to resolve the financial crisis.
But do you know your bank analyzes your credit worthiness before offering you a loan? Your bank might reject your loan for following reasons
- A high debt to income ratio
- A low credit score
- Your income and employment history
So what should you do next?
The best option available is approaching licensed money lenders for a loan. They offer various types of loans such as debt consolidation loan, personal loan, payday loan, and even business loans with specific repayment tenure. The best part is that these money lenders are authorized by the Singapore government to offer loans and the whole money lending business is guided by the laws and regulations framed by the Singapore government.
Here are few advantages of borrowing from authorized money lenders in Singapore.
The authorized money lender has fewer constraints and financial issues related to approval of the loan. The process of loan approval and repayment is more flexible in comparison to other money lending institutions.
The money lender knows the urgent financial needs of the clients. Hence they make the loan application easier for their clients. Some money lenders also accept online applications.
In comparison to banks, the money lender asks only for basic documents that can be easily gathered. You may be required to submit documents like CPF statement, income tax statements, and NRIC card.
No Credit checks
Not all money lenders will check your credit score before approving your loan. They are less concerned about your credit history as your monthly income establishes your ability to repay the loan.
No Income limitation
Some banks look at your monthly income when approving loans; the higher income you have, higher the possibility of loan approval. This is not the case with money lenders; they also offer loans to people with lower incomes. The main criteria they look at is the ability of the loan applicant to repay the loan.
Unlike banks, money lender loan approval is quicker as there are fewer conditions involved for loan approval. In fact, if you have all necessary papers, the money lender might approve your loan within a few hours. You may walk in with loan application and walk out of money lenders office with the loan amount.
Since money lending business is guided by the rules of Singapore government, you need not fear harassment from legal money lenders.
Capped interest rate
As per Singapore government rules, the authorized money lender is required to compute and disclose the effective interest rate on loan to the applicant. According to the financial laws enacted by Singapore government, from 1st October 2015, the maximum interest rate money lender can charge is 4%. This cap on interest rate is applicable for secured and unsecured loans and irrespective of borrower’s income.
The money lender can customize a business loan, personal or payday loan a per customer’s financial needs. You can ask for a lower interest rate or an extended repayment period and the money lender might agree to it.