Whether you’re looking for a personal loan to help you achieve your own goals or are looking for the capital to help your business fulfil a major order, it’s important to be informed about your options. There are thousands of lenders in Singapore, so narrowing them down to a shortlist of acceptable vendors who offer products that align with your needs is crucial. The first question you need to ask yourself is what kind of lender you will be working with. In our city, your choices are banks and licensed moneylenders. Read on to find out a little bit about the differences between the two and make your first step on your journey to financial success an informed one.
How you go about applying for the loan also differs sharply between banks and moneylenders. Much of it hinges on the size of the operation; banks are enormous organisations, often spanning multiple countries and continents, and as such they are going to require a much more complex and lengthy application process. Moneylenders are highly localised operations with smaller, more tailored client lists. Thanks to this, you can expect the application process to go a lot faster with a moneylender.
Differing loan principal amounts
In general, banks institute a floor to their loan amounts, refusing to provide loans below a certain principal. This effectively locks a great deal of people out of the market. If you only require a small amount of money to get your car serviced or to make a small fix to your home, the banks may simply be unable to help you.
This is where moneylenders can be a great service. Many of them specialise in loans that are too small for the banks, putting the capital people need within reach.
Who can apply
Banks are extremely stringent with who they will lend to, and will aggressively screen potential lenders with credit ratings below a certain threshold. Largely as a result of that smaller loan principal amount, most moneylenders are more welcoming to individuals recovering from financial hardship or who have struggled to maintain a top-tier credit rating. If you’re working hard to build your financial future after past troubles or have a limited borrowing history because of age or recent immigration, a moneylender may be more willing to help you.
How quickly you will receive the money
A smaller operation means a more agile one, so where a large bank may take weeks to finalise payment of the loan amount, moneylenders can frequently make the payment within a day, or even within the hour. This makes them ideal for individuals who need capital to remedy a problem as quickly as possible, so if you’re trying to get your car fixed or pay a medical bill, a moneylender is the place to go.