Singapore is one of the world’s most expensive countries. Any Singaporean knows that banks have stringent requirements for borrowers in the country. Consequently, the Ministry of Law has made it possible for moneylenders to become valid financial institutions.
While they’re younger than banks and other financial institutions, a licensed moneylender can offer substantially competitive rates. Furthermore, getting your loan application results from a money lender in less than a week makes them convenient avenues for financing.
Who Are Licensed Moneylenders?
Licensed money lenders have a bad reputation because of Singapore’s long list of syndicate-backed “ah longs” or loan sharks. The Ministry of Law’s licensing of moneylenders across the country helped reduce the country’s loan shark numbers.
Furthermore, a strict set of operating guidelines helped legitimize the money lender industry with proper regulations and arbitration. Now, Singaporeans and foreigners in the country can borrow from licensed money lenders without fear of harassment, inconsistent loan terms and conditions, and fair interest rates.
Advantages of Using Moneylenders
Truthfully, banks and the licensed money lender industry in the country do not overlap each other’s markets. Banks have more in-depth financial resources vs a licensed moneylender. However, even with their smaller loan offers, licensed moneylenders have lenient guidelines, a fair interest rate in each financing, and accessible personal loans.
Here are four undeniable advantages to using a licensed moneylender’s offers in case you need quick financing.
1. Faster Approval Speed
A licensed moneylender can provide quick-approval loans because borrowers can only borrow just enough for a loan amount. Furthermore, all their financing is unsecured loans. This financial product might have negative connotations, but unsecured loans in small amounts are as useful as a credit card because of their accessibility.
Additionally, licensed moneylenders don’t need to perform an in-depth investigation and collateral evaluation before approving the loan. This shortens the borrower’s approval waiting time, allowing them to have much-needed financing immediately and conveniently.
2. Unsecured Loans
Loans without collateral typically have high-interest rates. However, these are dangerous if you can loan higher than S $50,000 with a more extended repayment period. Fortunately, licensed money lenders can provide you with adequate amounts and a shorter repayment period. Therefore, an unsecured loan becomes manageable than a lengthy, unsecured bank loan.
Furthermore, some borrowers just need enough money that won’t even go beyond S $10,000 to pay for particular needs. Money lenders can provide low-amount funding, making it easy for them to approve loans quickly without considering the lender’s credit score.
3. Immediately Accessible
A personal loan from banks goes through several hoops and can take over a month or two to receive a decision. If your credit score fails to make the mark, and the bank’s calculations indicate your income can’t support your payments, then it’s an effort that has gone all for naught.
However, with money lenders, you can get your loan approval in less than a week. Once you submit all necessary documents, the lender can give you an approval almost immediately. Therefore, if you need emergency medical funds, you can count on money lenders to help you.
4. Regulated Activities
The Ministry of Law in Singapore oversees all the approvals and activities of Singapore money lenders. Therefore, with its imposed set of rules, customers can protect themselves against any possible abusive behavior from moneylenders.
All Singapore money lenders have to pass a detailed exam before they can receive their license to operate. The Registry of Moneylenders lists all the names of dependable licensed moneylenders in the country. Furthermore, the Registry will remove any moneylender violating the stipulations of the Ministry of Law.
Easier Requirements to Take Out Financing From Moneylenders Than Banks
Singapore’s money lenders have fewer financing requirements when you compare their activities with banks. For example, banks will require some high-amount loans to have collateral. On the other hand, money lenders only provide unsecured loans, which allow them to approve most applicants whose income and work stability they have established.
For any licensed moneylender, you’ll only need to fulfill the following requirements to have the fairest interest rates, which are undeniably better than banks.
• Above 21 years old
• Singaporeans and Permanent Residents: must have at least S $18,000 income and above
• Foreign borrowers: must have S $24,000 income and above
Truthfully, licensed moneylenders will accept your loan application even if you’re way below these typical stipulations. Unfortunately, better-qualified borrowers will always have a higher priority than you. In case they accept your application, licensed moneylenders may impose higher interest rates on you than other qualified borrowers.
Documents You’ll Need To Submit
Here is a list of the usual documents that borrowers need to submit to qualify for any licensed moneylender personal loans and financing options:
• Identity Card/NRIC
• Proof of Residence (recent bills, a letter addressed to your property, rental or otherwise)
• Tenancy Agreement (for tenants renting properties)
• Employment letter
• Recent 3 months of payslips for newly employed (less than 6 months) borrowers
• Singpass details
• Valid work permits, S-Pass, Employment Passes (for foreign borrowers)
• Passport (for foreigners)
• Latest bank statement where your employer credited your income (for foreigners)
Fun fact: these are the same documents you’ll submit to financial institutions. However, licensed moneylenders aren’t strict with policy once you’ve established your income and employment conclusively.
Why Your Credit History Doesn’t Matter With Licensed Money Lenders
Anyone who has applied for a credit card knows that it has a lower credit limit than a loan offer from Singapore moneylenders. However, a credit card has stringent requirements because of its revolving nature and accessibility.
Money lenders in Singapore have fewer requirements and do away with a borrower’s credit history altogether because they wish their products to be accessible. Truthfully, the low personal loan amounts you can take out from these Singapore lenders can pay by the following month.
What they evaluate is not your mere credit score but your ability to pay back the loan amount and the interest rates it can incur over the repayment period.
Additionally, money lenders can select the final total amount you can borrow. They’ve calculated and made estimates to make sure you won’t get into deep debt. You can provide your ideal loan amount, but money lenders will inform you of their adjustments before approving your financing.
Get Better Interest Rates Than Bigger Financial Institutions
In most cases, money lenders have higher interest rates than a bank. While it sounds counter-intuitive, money lender rates are fair and better than banks. With loan offers smaller than banks, the high interest accompanying your loan is easy to manage if you miss a repayment or incur additional penalties.
Money Lender or Bank, Pay Your Loans on Time
Money lenders can save many Singaporean and foreign borrowers from substantial debt thanks to their customer-friendly service. However, any neglected financing — whether from lenders or banks — can become a considerable problem with missed payments and increasing interest rates.
Unknown to many, borrowing money from financial institutions takes an emotional toll and requires in-depth preparations to manage smoothly. If you fail to plan before taking on additional financing, you can easily find yourself in hot water with numerous penalties and interest additions.
Work With Moneylenders to Get Your Loan Approved Quickly!
If you’re looking for the most consumer-friendly loans for any purpose in Singapore, you can’t go wrong using the services of Raffles Credit. With more than a decade of providing easy-access financing to Singaporeans and foreigners in the country, we guarantee the best amounts and rates for all your needs. Our staff is ready to assist you as soon as you fill out our application form. If you’re just inquiring or having difficulty deciding on which financial service to use, please use our contact page to learn more about everything that we can achieve with you today.