However, registered money lenders present an alternative to banks because they require fewer documents and more flexible payment schemes. Banks tend to scrutinize every financial record under your names, such as your credit history and personal information.
Much like any other country, Singapore has its requirements for availing of a personal loan. They are pretty straightforward. First off, the borrower must be a Singapore citizen or a Permanent Resident. Also, they must be at least eighteen years old by the time they make an application. In addition, they must also have an active bank account in a registered and regulated financial institution in Singapore.
After this, they must proceed to their institution of choice to apply for the loan itself. For banks, a borrower must fill out the application form at their physical location. The form asks for personal details such as the full name, residential address, and gross monthly income. Of course, the amount desired must also be indicated in the form.
When the application form is completed, the bank will review financial records and credit scores. These will be the deciding factors if the loan will get approved or not. All submitted information must be valid and authentic.
Licensed moneylenders have a similar policy. Once again, the borrower must directly head to the office of the institution. There, they will file the loan application through a given set of forms. Persons interested in a loan must always have a valid identity card and their SingPass login details. These are needed to proceed with the application.
What are the differences between a licensed money lender and a bank?
The average person might think there is no difference between a licensed money lender and a bank. They are both financial institutions offering people a chance to borrow money, which might be the only thing people will pay attention to because of need. However, when you are already in a financially challenging situation such as an emergency or a due date, it is essential to weigh all options carefully.
Time taken for approval
Banks may take up to four to five business days to process a loan. However, official money lenders can process your borrowed money in less than an hour. For those who need to make personal loans for emergencies, this turnaround time makes lenders a very lucrative option. Furthermore, since the approval of bank loans may take days, you might have to make several visits and phone calls before getting an answer.
As for money lenders, the officer-in-charge will personally approach you once the loan has been approved. Loan approval time for licensed moneylenders like UK Credit can be as fast as 20 minutes.
There are also fewer requirements needed, and making an unsecured loan with a lender does not affect your credit score. If you are worried about affecting your chance at transactions with other institutions, loans with a lender will not put you at risk of any sanctions.
Likewise, your credit history matters when it comes to transacting with banks. These records are strictly inspected to assess your eligibility for a loan. However, moneylenders are more relaxed when it comes to checking your credit history.
Singaporean banks typically provide loans to people with an annual income amounting to S$20,000. Should your salary fall below this amount, the chances of your loan getting approved are almost nonexistent. However, accredited moneylenders such as UK Credit are more lenient when it comes to income requirements. That way, more people can have access to their loan options.
Because licensed moneylenders such as UK Credit are more flexible in income requirements, those who get their loans approved can enjoy access to a broader pool of money. Depending on the income bracket, loans are allowed to go as high as six times the borrower’s salary. These resources are more than welcome for those who need more cash to finance emergencies or special occasions.
With regards to processing fees, money lenders are only allowed to charge processing fees with a maximum of 10%. There is also a cap placed on total borrowing costs, and hidden fees are not permitted. In the past, late penalties were not capped. However, institutions can no longer charge for fees going beyond $60 monthly, and both late and nominal interest rates are limited to 4% per month. Administrative costs are also capped at 10%.
Banks have longer payment terms, which can be inconvenient for those who do not like the idea of being stuck in a loan. The amount of time and commitment can be daunting, and interest rates may pile up. Licensed moneylenders like UK Credit have a shorter payment duration, which means that you can settle the debt faster.
Types of loans available
Many financial entities provide potential clients with loan options. These include a personal loan, which is often used to finance expenses credited to an individual. Another is a home equity loan, which functions as a secondary mortgage. There are also options for small businesses that need capital to get off the ground. Moneylenders offer all of these loans at shorter payment schemes, higher amounts, and shorter approval times. UK Credit also offers specific loan options for occasions such as weddings and further studies.
When deciding to approach a money lender or bank for a loan, one must consider all the options at hand. After all, it is not advisable to make hasty decisions about finances when one is worrying about expenses. It is essential to seek a credible financial institution in Singapore to help you deal with a pressing financial concern. One must be particular about the interest rates, licenses, and approval time. These are crucial factors to the feasibility of every personal loan.
UK Credit is a licensed moneylender certified by the Registry of Moneylenders, Ministry of Law (Minlaw) to offer loans to individuals and businesses under Minlaw’s regulations. We believe in allowing individuals to receive funds to meet their personal finance goals. Borrowers can have their loan applications approved fast and enjoy a low interest rate of 4%. Check out the loans and make an application online here!