Posted on 2014-02-03
If you need to borrow money in Singapore, you might be wondering where to go for a loan. The two main services that locals use for loans are banks and money lenders. Some examples of banks you have probably heard of include Standard Chartered, Citibank and DBS. On the other hand, some well-known money lenders include Max Credit, CashMax Credit, CYS Credit and Sumo Credit Pte Ltd. Before you approach any of these businesses for a loan, know the differences to look out for in money lenders and banks.
The Amount of Money You Can Borrow
In Singapore, money lenders are regulated by the Registrar of Money Lenders, which determines the amount of cash they can lend to borrowers. The regulations also decide what kinds of fees and interest they are allowed to charge, which means you can expect to get a fair deal when you go to a licensed money lender for help.
At the same time, due to these restrictions, the loans available from money lenders tend to be smaller than the ones you will find at banks. So if you need a few hundred dollars – or even up to about $1500 – to buy groceries or pay bills before you get your next paycheck, a trip to a money lender is a good idea. But if you need to borrow a larger amount of money, such as to remodel your home or start a business, a bank might be a better idea.
Speed of the Transactions
If you need money fast, visiting a licensed money lender can be helpful. This is because you can often get a loan within an hour or less! But when you visit a bank, it can take days or even weeks to get approved for the money you need. This is often due to the sheer amount of paperwork involved in the process, which means a bank is not usually the right place to go when you need the money from a loan today.
Both banks and money lenders perform credit checks on applicants in Singapore. However, banks tend to be picker about the results. You often have to have a good credit score and a low debt to credit ratio to qualify for a loan, especially one that will give you access to thousands of dollars. And if you want the lowest interest rate possible on your loan, you need to make sure your credit score is above average when you borrow money from a bank.
If you are worried that you will not pass the credit check for a bank, consider visiting a licensed money lender instead. Money lenders are often a little more forgiving when it comes to credit scores and debts. Of course, if the credit check reveals that you already have a lot of loans out from other lenders, you might not get approved for the loan you want. This is because money lenders want to make sure you can pay back what you borrow. But as long as you can show that you have enough income to repay your current debts and take on more, you should be able to get approved.
As you can see, there are a few big differences between banks and licensed money lenders in Singapore. If you are not sure what kind of loan you would qualify for or what kind of financial institution would best meet your needs, feel free to contact Sumo Credit Pte Ltd or browse our website to learn more about your options.