Borrowing money has always been a last resort for many. In fact, the question of where to borrow money hasn’t always been a choice for the majority. At that point, most Singaporeans just want to get the loan without caring whether the lender, their rates, or anything may matter during repayment time.
Well, as a prudent finance student of life, you ought to plan for now and the future. That way, it may be possible to give yourself options when deciding who to borrow money from. On that note, between the bank or licensed money lenders, who should one go to borrow money from? And why should one settle for one and not the other? Let’s find out.
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Flexibility
Making the decision to borrow from a bank or not is easy. But if you’re looking for a flexible lender in Singapore, then a private lender should be your go-to option.
Banks are regulated by central banks, which takes the freedom to be flexible from them. That means you should opt for licensed lenders if you want a lender that will bend to accommodate your needs.
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Responsive
Your loan can be processed faster by a private lender because you need it urgently. However, you may have to be a little more patient for banks as the protocol is observed to get the approvals done.
If one signature misses the hierarchy or one officer refuses to sign, the process may stall. That is why it may take longer before you get approval.
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Requirements
Banks are regulated. That means more paperwork and requirements. That is why it’s even harder for foreigners in Singapore to get loans.
Not only is it about the requirements but also about limits. For example, banks will limit your access to credit services if you earn below $20K. That means you have to make a significant amount of money for any form of loan to be given to you.
That is why some people prefer alternatives. The private lenders do not come after unnecessary requirements. Their main objective is to get and retain clients who happen to be dodgy and hard to find.
That is why they do all they can to retain clients. But, unfortunately, these too many requirements make banks lose clients with time because they are sometimes unresponsive to urgency.
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Interest rate
Now, this is why some people stick to bank loans. If you’ve dealt with a loan shark, you know how messy it can become for both lenders and borrowers.
Banks offer relatively lower rates as they are regulated by central banks. On the other hand, other lenders may go higher.
This is why you must go for the banks if that is an option you can exploit. The private lenders’ rates can be so punitive, especially if penalties start to accrue helplessly because of your inability to repay the loan.
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Overdue treatment
The kind of treatment you get when your loan becomes overdue matters significantly. Banks will take a lot of time before choosing to take adverse action. However, other lenders will quickly initiate destructive debt collection processes just moments after due dates.
Banks are regulated with the option to write off loans. But, on the other hand, most lenders will go to any length to recover that loan. They will do everything to get to you no matter how long it takes.
That is why you should go to the bank if you do not expect changes in your cash flows. The bank loan will not hit you with unnecessary penalties compared to these other limitless lenders.