Introduction.
If you are in need of a short-term loan, there are many ways to go about it. You can apply for a personal loan from your bank or credit union, or even apply for an unsecured loan online.
But what if you don’t have enough cash on hand? If that’s the case and you need money fast, then one option is to get a loan from a moneylender in Singapore.
Pros:
Quicker Approval.
In comparison to banks, moneylenders are more flexible and forgiving in their approval process.
You don’t need to wait for a credit check or a deposit as collateral before borrowing from them.
However, this is not to imply that moneylenders have no checks on who they lend their money.
The same rules that apply when applying for loans with banks apply here: if you have a bad credit record or no income, then your application will be declined.
In short, the quick approval process comes at the expense of higher interest rates and high risks associated with lending large sums of money without collateral.
No Collateral is Required.
In Singapore, you can get a loan without collateral. This is because the moneylender does not ask for your assets as collateral.
However, if you default on the loan or are unable to pay back the debt within a specified time period, then they have the right to take away these assets.
Additionally, it is possible to get a loan without having a job and without having an active bank account.
All credit-level borrowers can get loans.
Borrowers do not have to be residents of Singapore. You can apply for a loan even if you are on a long-term visit or taking up employment in Singapore, so long as you can show that you have the means of repaying the loan.
You don’t need to be employed with a salary income. Suppose you have other means of generating income, such as rental income or dividends from stocks/shares/ETFs. In that case, your financial situation may be better than someone employed and earning only S$2,000 per month after deducting CPF contributions.
You don’t need any credit cards or bank accounts. You can still borrow money without having any credit cards or GIRO accounts at banks because our company does not rely on these criteria for lending approvals but instead uses more objective and fair criteria like job type and source of income instead.
Cons:
The downside of borrowing from a moneylender is that their interest rates are often quite high.
In addition, if you are unable to make your payments on time, the lender may get very aggressive with you. Furthermore, in most cases, the loan repayment terms are very strict and set by law.
Often High-Interest Rates.
The interest rates that moneylenders charge are high, but you can negotiate with them to lower the rate.
They will likely be more willing to make a deal with you if you need their services on an urgent basis and don’t have time to wait for approval from another lender.
The rates that moneylenders charge are higher than those of traditional banks because they work on a risk-based system in which borrowers pay according to their credit history.
Those with no credit history or poor credit scores will pay higher interest rates than those with good scores and established histories with reliable financial institutions.
Strict Loan Repayment Terms.
There are several factors to consider when deciding whether or not to borrow from a moneylender.
One of the most important is the strict repayment terms they use. You can expect to be charged late fees if you miss a payment.
The interest rate on your loan may also increase if you’re late with one of your payments and this will affect how much money you pay back each month, which means that it’s even more important for borrowers to make their repayments on time.
Moneylenders in Singapore don’t offer long-term loans; instead, most loans have short terms and require weekly or monthly repayments that can be automatically deducted from your bank account once every week or month, respectively.
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Conclusion
We have discussed the pros and cons of borrowing from a moneylender. Although it is easy to get a loan, you need to be careful.
The interest rates are usually higher than banks, and lenders can get very aggressive with delinquent borrowers.