Borrowing from a licensed money lender has grown so rampant among individuals and businesses in Singapore. A money lender is the go-to option for financing unplanned expenditures, such as a medical emergency, car repair, or sudden home repair that needs immediate payment.
Therefore, this post will discuss the benefits of getting loans from a licensed money lender.
Why Borrow from a Licensed Money Lender
The following are some of the benefits that make individuals opt for obtaining a loan from a licensed money lender:
1. Quick Loan Processing
Unlike borrowing from banks, which takes longer, borrowing from a money lender is quick once you have researched and settled on the most suitable money lender to borrow from. You only need to submit the required documents, and once you are approved to qualify for the loan, you can get the loaned amount within a few days.
2. Flexible Repayment Options
Money lenders offer a flexible repayment schedule. Therefore, depending on your financial circumstances, you can discuss the most convenient repayment schedule and terms with your lender. This flexibility is helpful when your income does not stay the same month after month.
3. Easily Accessibility
Licensed money lenders provide credit services to many people, even those with bad credit records. While a borrower will not qualify for a bank loan, one can still access credit from money lenders.
4. Transparent Terms
Because the law governing money lenders operating on the license is highly regulated, there is a high level of transparency. The money lenders are legally required to make loan agreements with borrowers clear and candid without any hidden fees or charges.
Things to Consider Before Taking an Instant Loan
Given the benefits of getting loans from money lenders, including the easy accessibility, assessing whether you need that loan is essential. Mainly, just like getting financing from other financial institutions, you can land into a debt trap if you are not careful in determining whether to borrow.
So, even when loans from money lenders seem to be an effective way out from a financial challenge, consider the following before taking the loan:
Interest Rates: With licensed money lenders, the interest rates are capped at 4% but vary from one money lender to another. Therefore, you must shop around for the best interest rates by comparing different money lenders and the total cost of the loan over the loan’s tenure.
Terms and conditions of getting the loan: You should understand the loan terms, including how long it takes and the monthly installment. Also, you should find out if such repayment terms are within your reach without destabilizing you financially.
Fee charges: Besides the interest rate, the licensed money lenders have the right to a processing fee or late payment charges. Therefore, this calls for you to understand the total cost of the loan.
Debt Management. Since a loan should be your last alternative, you must have an exceptional plan for repaying your debt to avoid falling into a debt trap.
Conclusion
Loans from licensed money lenders in Singapore are an excellent financial tool if you borrow responsibly.
Therefore, you can weigh your options when faced with a severe economic situation and searching for the proper lender. If the benefits of borrowing from a licensed money lender outweigh the rest of the options, then do your research and borrow responsibly.
Lastly, have a practical plan to manage your debts to avoid falling deep into any debt trap.