Have you ever experienced borrowing cash from a financial institution and got denied? Where can you turn to? A loan shark maybe?
In our modern society, there are various institutions involved in money lending, but money lending Singapore is regularized by their law. Money lenders need to submit conditions before building their business which caters to emergency cash needs of regular workers, and be approved. However, what’s the difference between an accredited money lender as well as a loan shark? Or what gets a Singaporean resident borrow money from a licensed money lender as opposed to a bank?
Before we carry on, let’s define what a loan shark is.
A loan shark is a person who’s into cash lending with tremendously high rates of interest. Oftentimes, loan shark applies repayment with all using threats or blackmail of violence.
In Asia, particularly in Malaysia and Singapore, Ah Long is a slang term for loan shark. They provide loan to individuals who are not allowed to get money from any legal association like banks loans. Usually, their target are gamblers. The rate of interest in their incredible and illegal money lending business is around 40% a month. If you fails to pay in time, threats will be spray painted or write by Ah Long on the wall of a debtor’s house.
While humiliation is used by accredit money lenders are distinct. Yes, they’re also in the money lending organization nonetheless the only real difference is the – manner.
Licensed money lenders call themselves businessmen. They would like to make an excellent reputation in money lending, and wouldn’t wish to scare customers and be arrested by authorities.
Just what exactly makes a licensed money lender different from a bank?
There are few reasons why Singaporeans prefer to borrow cash from a licensed money lender than a bank:
1. Small loans. Money lending targets at those small entrepreneurs or people who want unsecured loans or payday loans. Money needed seriously to pay electricity bills, gas fees and getting the car fixed are some examples. Money lenders that are licensed aren’t an option for big corporations or companies that need additional funds.
2. Quick transaction. In the money lending industry, individuals understand how long the procedure in receiving loans from banks; as they are going to check your own credit score. Within half an hour, your loan might be approved with licensed money lenders and you could receive your cash immediately.
3. Credit Appraisal. In the event of authorized money lenders, they are not as finicky about it. The reason to this is that they target individuals who cannot apply for a bank loan due to low or poor credit rating. Nevertheless, moneylenders will have to reject an application if:
(a) There is huge outstanding loan from a different money lender,
(b) A man has a considerable or substantial amount credit card debt.
Another point here is money lenders can give former bankrupts loans if and when they present a letter of discharge.
As many residents are living in a “paycheck to paycheck” world, money lending business is growing in Singapore. You will find times where their salary is not sufficient to cover all the unexpected bills.