Whenever you are going through a financial crisis and need money, the last thing you would want to know that you have borrowed money from an unlicensed moneylender. Hope you know that they are illegal and dishonest. They also charge unreasonably high-interest rates.
Licensed Private Money Lenders:
These are the companies that offer money lending services other than financial institutions. They are licensed private money lending companies.
To operate the company, you have to be registered with the Registrar of Moneylenders in Singapore. The government strictly regulates them. The government put a check and balance whether they are offering fair rates to the client or not. Also, they ensure that they don’t overburden the people with extra debt they can’t afford. Make sure you borrow from a well-known licensed company in Singapore.
How Does the Licensed Private Money Lenders Work?
In Singapore, a variety of individual and businesses loans offers by Licensed private money lenders. These companies are regulated by the government strictly. The government coheres to a strict code of ethics under the Ministry of Law. There should be transparency of interest rates, fees, eligibility requirements, and charges.
The licensed private money lenders thoroughly look at your monthly wage, and the total debt servicing ratio before makes your loan granted. People whose salary level do not match the criteria will be further considered for a loan.
People whose Total Debt Servicing Ratio will exceed 60% should get the loan as they seek. It is essential that you easily offset the loan, and the loan will not become a burden for you.
The Difference Between Licensed Private Money Lenders VS. Other Traditional Lending Institute
As you know that both lenders company check the credit history. The traditional institutes have strict requirements that mean people who have a bad credit history will not be able to get a loan.
But a licensed private money lender is less stringent not only that they also loan packages for the people with bad credit.
The difference between the interest rate between tradition lenders and licensed private money lenders is that in traditional lending, they offer lower interest rates with a better credit rating. Whereas licensed private money lenders give money on a higher interest rate, but that will be fixed for many years.
Loans amounts policy in traditional lenders companies is more conservative. But with a licensed private money lender, you will be able to get a higher amount of loan.
Most of the licensed private money lenders are quick to approve the loan applications as they do not require much documentation.
The traditional lenders will need some security as they provide you the loan. But the licensed private money lenders do not require any security, so you don’t need to worry about seizing your assets if you are unable to pay off the loan.
Reasons to borrow from Licensed Private Money Lenders
The limit of private lenders is higher, and it is four times your monthly wage. So that means the eligibility applying for the loan is that there is a proof of employment, and also your income proof.
Much Simpler Application Process
The application process for most of the licensed private lending company is much simpler. You only have to put the application online and submit the necessary supportive documents. You can save time as the process faster. Not only that you will also receive the funds quickly.
A licensed private money lender tends to be more flexible when it comes to terms and conditions. Licensed private money lenders make you apply for a loan more efficiently and also when it comes to the pay off the loan amount the conditions are favorable.
Fixed Interest Rates
The interest rates are fixed for several years, and it’s a major benefit for you. That’s how you know how much money you have to pay during the loan returning time. And the interest rates are much lower.