Moneylender or Bank: Which Is Better for Quick Loans in Singapore?
Whenever one faces a financial setback, applying for a loan from a licensed moneylender or a bank immediately comes to mind.
But which one would be more suitable for you when you need a quick loan? A licensed money lender is your top choice. They need the least paperwork, and the waiting is short as long as you meet all the minimum criteria for a loan.
Therefore, in this post, we’ll discuss why a licensed moneylender is suitable for quick cash.
But first, let’s compare the two.
Moneylender vs Banks: How Each Works
Banks are well-established and enjoy a stable reputation. Notably, their interest rates are comparatively lower for personal loans, but the approval policies are somewhat rigid and take more time. Therefore, if you intend to apply for a bank loan, you should be ready for the rigorous application process and wait longer to get the loan.
On the other hand, licensed money lenders specialize in giving smaller short-term loans and have faster approval. Significantly, they are regulated under Singapore’s Ministry of Law, so you can be assured that they operate within legal bounds. Licensed moneylenders are your go-to option if you are looking for a quick loan. They will process the loan within a day and are safe.
Why a Licensed Moneylender is a Suitable Option for Quick Loans
While there are many advantages to borrowing from banks, including access to cheap loans, sometimes, especially when time is of the essence, borrowing from a licensed moneylender is the only reasonable option.
Therefore, if you need a quick loan, below are the reasons for applying for one from a licensed moneylender.
Ease and Speed
Licensed moneylenders are usually a better option if you’re after speed. Banks require a lengthy loan application accompanied by other requirements, such as a good credit score, and it takes days before they give their yes.
On the other hand, a money lender will require minimal paperwork, and within hours, you shall have your cash, which is a life savior, especially when you need urgent money.
Notably, the convenience moneylenders offer comes at a cost. Unlike banks, licensed moneylenders charge higher interest rates, which could make your loan more expensive in the long run. So, while it’s quicker, assessing whether you’re willing to pay for that convenience is crucial.
Loan Amount and Flexibility
Money lenders offer much-needed flexibility, especially if you need a small loan or have a poor credit score. Usually, money lenders don’t expect perfect credit, and they can often be pretty flexible regarding the loan amount and even willing to move the due date to a time that better fits your situation. In the case of the freelancer or gig economy worker, this is instead a big plus
The bank, however, is only suitable if you are looking for a big loan. They can lend that amount of money to you as long as you have a high credit score. Notably, they are rigid in their requirements, and if your credit standing is not good enough or you do not have a regular source of income, they will immediately reject you.
Verdict
Banks are only better if you have good credit, a stable income, and can wait. They offer considerably cheap loans if the borrower is ready for the elaborate application process and prepared to wait.
However, if one is in urgent need of cash and does not quite fit the criteria that most traditional banks seek or if one requires flexibility, a licensed moneylender will be a real alternative.
It all depends on your specific needs. While each has pros and cons, knowing precisely what you need and your qualifications will enable you to make the right decision.
