With so many financial institutions in Singapore to choose from, it can be hard to even begin to decide who you should borrow from. It’s a decision that requires careful consideration, as choosing who your lender is has a huge impact on the terms of your loan, which in turn impact how the loan will affect your financial future.
In Singapore, there are two classes of institutions accredited to provide personal loans – banks and licensed moneylenders. Their differing corporate structures and product offerings mean that borrowing from one can be a starkly different experience from borrowing the other. This said, licensed moneylenders do offer borrowers a number of attractive benefits, especially where their needs do not align with the products offered by Singapore’s banks. Read on to find out more.
Smaller loan principals
Banks by and large offer substantially large loan amounts to borrowers, potentially locking individuals with seeking smaller loans out of the market. Many banks offer personal loans starting as high S$5,000. If you only need a few hundred or a couple of thousand dollars to repair your car, pay a bond or upgrade your appliances, this is far too much. The first rule of borrowing is only borrow precisely as much as you need, so simply taking the higher amount is often a bad idea.
Into this market gap comes licensed moneylenders. Many moneylenders can offer much smaller loans, often under S$1,000. This is perfect for people with smaller or less expensive needs who only need a small amount of additional credit to tide them over between pay days, for example.
Greater credit score flexibility
Moneylenders are also generally more willing to provide loans to people with credit scores below that which a bank would consider the minimum for a borrower. This opens up loans to people with a broader range of credit scores. Everyone can need some help from time to time, so choosing a moneylender ensures that more people can access that support when they need it.
Faster approval process
Moneylenders can also offer rapid or even same-day approval on loan applications, making them ideal for individuals with a sudden and pressing need for additional capital. When you need your car repaired for work as quickly as possible or need to finance a replacement purchase for something essential, a moneylender is the place to go.
For more information on how a personal loan through a moneylender can support you, speak to one of the experienced loan consultants at Fast Money.