The cash problem is widespread in the current economic period. There are cases where you look at unpaid bills on your desk and wait for threats from your creditors. It also happens that you need a cash loan because you are unemployed. With more than 160 legal money lenders in Singapore, finding a reliable lender can be difficult if you urgently need a quick loan. This article explains in detail the various lenders in Singapore: how they work, their interest rates, etc.

Meaning of money lenders?

Money lenders are group or individuals that give out small amount of money for personal use at very high interest rates. Money lenders interest rates are high due to the fact that their loans are more riskier than established banks.

For most people without a bank account, with a history of bad credit and for those who have too much debt (the banks will not lend them anymore) who have no relatives or friends who can offer credit a money lender is their only option.

Money lenders tend to offer only small loans, because they are small businesses that cannot afford to lose millions of dollars if a borrower goes down.

How much can a licensed money lender borrow you?

A licensed money lender has a legal right to lend you up to $ 3,000 if your annual income is less than $ 20,000

However a licensed money lender can grant you a loan higher than $ 3,000 of up to 2 or 4 months if you earn more than $ 20,000. These factors all depends ultimately on how confident they are that you pay them back.

This is the main reason why money lenders is only ideal for either small, unexpected expenses, such as repairing a car, paying a clinic, or paying for a cheap airline ticket. Money lenders are not an alternatives for large business loans.

Benefits of getting loan from money lenders

Money lenders are faster and have fewer restrictions on their citizenship or income. Banks typically lend only personal loans to Singaporeans or permanent residents with an income of more than $ 20,000 or if you are a foreigner with an annual income of more than $ 45,000.

However, with money lenders, you can get approval of loan in minutes, and you have no worries if you have bad credit score. Note: For these privileges, you usually pay higher interest rates than a bank, often between 25 to 30%, which is the same as or even higher than credit card interest rates.

Top personal loan licensed money lenders in Singapore

Credit 21

Credit 21 is one of the leading legal and licensed money lenders in Singapore, licensed by the Ministry of legal affairs. They also give best interest rate and all transactions are transparent.

Credit Thirty3

Credit 33 is a legal money lender registered with the Ministry of legal affairs and registered in the Lender Register. Credit 33 offers personal loan that can meet all needs and budgets.

Horison credit

One of the most reputable and legally authorized money lenders in Singapore is Horison credit. The financing solutions offered by them are tailored to the needs of their customers.

U-credit

The Money Lending Company offers one of the cheapest rates in Singapore and is proud to be one of the most trusted authorized lenders for all types of unique loan applications.

CreditMaster

This is one of the leading licensed money lenders in Singapore. It is a recognized law firm of the Ministry of Legal Affairs, which is characterized by the satisfaction of 100% customers and innovative financial products.

Difference between money lenders vs. Bank loan

The main difference between money lenders and bank loans is the risk profile of borrowers. Banks focus on people with credible credit score and stable incomes, and also bank loans are inaccessible to people earning less than $ 20,000. While on the other hand, licensed money lenders give out loan to people with bad credit score and those earning less than $ 20,000.

Authorized money lenders usually only lend small loans up to $ 1,500 because Money lenders are much smaller than banks, they cannot run the risk of lending a huge loan to someone whose credit profile is very risky. While on the other hand banks can lend you up to $ 200,000 twice or even six times your monthly salary, even though they only lend to borrowers with stable incomes.

Another difference between money lenders and bank loan is in the interest rates while bank rates range between 5% and 7% (and up to 25% for credit card debt) per year, licensed money lenders can charge up 30 to 40% per month.

Law on money lenders in Singapore

Keep in mind that in Singapore you are also breaking the law when borrowing from unlicensed lenders. The law and rules for lenders in Singapore protect borrowers by imposing a maximum interest rate and a late-installment rate that must not be exceeded by licensed lenders. Licensed lenders also have to keep the confidentiality of the borrower’s information a secret.

Consequences involved if you can’t pay back your loan

If you have problems repaying your debts rather than running away, it is best to negotiate and create a payment plan that you can face with a lower interest rate if you can. You can do this through debt collection agencies or directly with the lender.

If you cannot pay your debts, even though you’ve tried credit counseling and still have too much to do to escape, you may need to go bankrupt. In that case, you may lose assets such as your car or your investment property.

Conclusions

There are lot of different options available rather than borrowing from a licensed money lender. For example, personal loan from banks are cheaper and more accessible unless you have no access to any of those due to bad credit score. Another option you could consider is borrow few hundred dollars from your friends and family. If nothing else pans out from the options listed above, then licensed money lenders might not be a bad idea, only if you are sure you would pay back on the agreed time.