Taking a loan from licensed money lender or traditional banks

How do you know which should you approach when you need a loan? With so many options available today, lets look into licensed money lender and banks first. We can look into P2P lending in the next article.

Taking a loan from licensed money lender or traditional banks
To loan from licensed money lender or bank?

Licensed Money Lender

Due to the media’s love for sensational news, licensed money lenders have been portrayed as loansharks, blood suckers, ah long and many more nasty names. Despite the fact that these companies are licensed by Ministry of Law, people still view licensed moneylenders as scum.

One of the most important things you should know about moneylenders is are they licensed or not? In order to find out, you can check this list of licensed moneylender by Ministry of Law. This list is updated by the law every month.

How do you borrow from legal moneylenders?

There are more than 150 licensed moneylenders in Singapore, it doesn’t sound like a lot but how do you shortlist which company do you borrow from?

Firstly, you can look at the online reviews. Reviews will give you an indication of how the company operates. However, you have to take note that note all reviews are necessarily true. There may be fake reviews written by the company. If the company has many reviews, then it is most likely to be true.

Secondly, you can use our platform! SG City Loan has spoken to almost all the companies. We are currently working hard to talk to everyone, but we will need some time to work on that. The companies that we have spoken to, we put them through a very long and thorough process to ensure that they live up to their claims.

Why do we do this? Because we want to make sure that your process of borrowing is smooth from start to finish. We have already gone through the screening process for you so that you will be able to save time. All you have to do is drop us your application, we will sift through all the lenders that we know and find the most suitable one for you.

We will also be able to give you a selection of money lenders in Singapore for you to choose from.

Last of all, something that we usually do not recommend but you can try it if you like, is to visit each and every moneylenders personally. By doing it this way, you can ensure that the company is to your liking. But this is very time consuming.

Imagine how much time you will spend travelling there, spending time talking to all of them.

We have already shortlisted the companies, you can visit these companies to see if any of them is to your liking.

SG City Loan

SG City Loan is here to help you find the best licensed money lender in Singapore. It is not easy to find a good legal moneylender even though there are so many companies. As you know, there are always black sheep in every industry. There will be good and bad companies operating in every type of business.

We have already eliminated the bad companies. You do not need to worry that we will be sending you any of them. Our pool of approved lenders are have been very well received by people who have submitted their application to us.

Try out our service today! Afterall, it is free of charge 😉 Drop us any questions you may have for us in this form.

Traditional Banks

Banks operate in a similar way no matter where you are on earth. They have their credit scoring system which they use when some one applies for a loan. You will then be judge against this scorecard.

Due to their low interest and long repayment plans, banks tend to have a very long processing time. You can easily wait between 1 week to 1 month. Sometimes they may not even get back to you! As such, you have no idea if they are still accessing you or has your application been discarded.

How to borrow from banks?

You can either walk into the bank to apply or you can do it at the ease of your home. Banks now provide the options for online application. However, banks tend to require many supporting documents. From your income proof to your credit score.

By walking in, you can enquire with the staff on how you can go about the process. This helps you in many way because you will be able to find out the interest rates, what they require etc.

However, banks have so many layers of checks that you may end up not being eligible for the loan.

Convenience – Banks or Licensed Money Lender?

If you have a good credit score, you should always try with banks first. However keep in mind that you will need to be patient. If you urgently require the money, banks may not be able to provide instantly due to the multiple layers of checks. You can apply in person or online!

Licensed money lender on the other hand will be able to provide you with a loan almost instantly. You will definitely have to be in their office for them to provide you with a loan. But on the bright side, they will be able to provide you with the money in an hour or less!

Interest rates – Licensed Money Lender or Bank?

Banks tend to offer a cheaper interest rate for a long period of time. This is definitely the ideal kind of loan. I mean, who wants to pay more right? Due to this reason, banks tend to have a very strict process. As such, their rejection rate for loan applications are high too.

Legal lenders in Singapore are only allowed to charge up to 4% per month. If anyone is trying to charge you more than that, it means that they are going against the law.

So which institution should you choose?

That really depends on how urgently you need the money. If you have time to spare, approach banks first. Otherwise you can apply for a personal loan with the many legal money lenders in Singapore.

Remember to factor in time, money, interest rates when you are choosing!