Singapore Personal Loan: Why Private Moneylenders Are Better Than Banks?

There could be a variety of reasons why you may need a personal loan. Right from encountering financial emergencies to spending on weddings to improving your credit scores, Singapore personal loan can come in handy in any situation where you find yourself stuck with reference to money. Perhaps you find yourself looking for the best Singapore personal loan rates or the best loan company in Singapore. Or you may even wonder if it is better to approach a private money lender or a bank to borrow a personal loan.

Generally, the buzz is that private money lenders are more preferred when it comes to a Singapore personal loan. Perhaps, you wonder why. There are many reasons to choose the best money lender over a bank for getting a personal loan. Read on to find out some of these reasons that explain why private money lenders have an advantage over banks when it comes to a Singapore personal loan.

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  A private money lender can lend you small loan amounts.

The most crucial difference between a bank and a private money lender is the loan amount. Banks prefer to loan higher amounts. But private money lenders can approve smaller amounts of loans, as per your need. So, if you require a quick Singapore personal loan that’s not too big a figure, then private money lenders are your best bet.

• A private money lender offers you better Singapore personal loan rates.

The best thing about private money lenders in Singapore is that they have fixed interest rates. As per the law, the maximum interest rate that a private money lender can charge every month is 4 percent. Factors like the income of the borrower or whether the loan is of a secured or an unsecured nature do not change this rate of interest.

• The loan application process is easy, fast, and convenient in the case of a private money lender.

With private money lenders, it is possible to get a Singapore personal loan in an hour’s time, provided your documents are clear. On the other hand, banks have a more difficult process of loan approval. Strict regulations that banks follow make the process more time-consuming and it can take up to 3 or more days to have your loan approved from a bank. So, if you need immediate help, then private money lenders prove to be a better choice.

• The late payment penalty policies followed by the private money lenders are more considerate.

In case of default payment, the maximum rate of interest that a private money lender is allowed to charge for a delay of every month is 4 percent per month. But that’s not all. Private money lenders may even negotiate a repayment plan that suits you and them, both. Some legal money lenders will also offer you financial counselling services.

As opposed to this, a bank would charge you a variable rate of interest. There’s an element of uncertainty as it can fluctuate every two to three years. The banks may even charge a higher rate of interest in such circumstances. Further, in some cases, they may even charge you on the total outstanding loan amount. So, even if there’s a one-time delay, you might end up paying a lot more.

• Your credit score is better protected when you borrow from a private money lender.

When you default payment, private money lenders are more accommodating as compared to the banks. They can even help you consolidate your debts and that can lead to improving your credit score. Skipping to pay your monthly installment will affect your credit score when you borrow from a bank.

• Private money lenders do not charge an early termination fee.

If you repay your loan before the decided term, banks charge you a fee. But legal money lenders don’t charge any such extra fees. So, you get the privilege of repaying earlier, without incurring any expenses.

That’s why private money lenders are preferred over traditional institutions like banks. However, remember to approach a licensed money lender. Working with a legal money lender will be absolutely risk-free as they are authorised and have an appropriate system in place.

So, go ahead, and find the best loan company in Singapore for a personal loan.