When borrowing in Singapore, you must consider the difference in personal loan in Singapore between licensed moneylenders and banks. Many factors do come to play in between the 2 kinds of financial institutions for the personal loan. Though they differ in approaches in Singapore, both have their personal loan qualities.
You have some stages in life that require different kinds of financial planning with significant milestones along the way. These milestones can include your graduation, marriage and getting a HDB flat. In order to tide your financial commitments over, you need to get a personal loan from the banks or licensed moneylenders. This is especially true for a high cost of living in Singapore that sees exorbitant prices of food and petrol all the time.
The licensed moneylender is a better lender of choice for personal loan in Singapore due to the fast, easy and convenient approval processes. If you in deep urgent need of a personal loan so badly, the licensed moneylender is a better choice than the bank. Not many documents are required for submission for approval when it comes to obtaining a personal loan from a licensed moneylender. The reverse is true for a bank. So if you need an emergency loan for surgery or a wedding short term, you can try a personal loan from a licensed moneylender.
Another difference between the bank and licensed moneylender for personal loan in Singapore is the loan amount. The loan amount borrowed from a licensed moneylender is usually smaller than the one borrowed from a bank. Hence it is much easier to pay back the personal loan to the licensed moneylender.
The rejection rate from a licensed moneylender is lesser than the one from a bank, simply due to the credit score thoroughness in checking. As the financial institutions have to comply with the laws of Singapore, banks are especially very stringent in credit score checking to grant approval for personal loan. This is to uphold its reputation and standing as a money manager.
Banks do research in detail on your credit score and is based on findings from the Credit Bureau of Singapore (https://www.creditbureau.com.sg/) which the licensed moneylenders do more from the Moneylenders Credit Bureau. This credit score will determine how you can get a personal loan easily. Even if the personal loan is successful, will the interest rates be high?
This is the question that is common among licensed moneylenders which tend to give out personal loans with interest rates that are higher and payment terms which are shorter. Whereas banks do more of the opposite. In Singapore, it must be ensured that you have a proper stable long term job in order to enjoy the personal loan in the longer term with lower interests and longer payment terms.
But whatever the differences are, it is important for one to pay off the personal loan in Singapore faster. After all, no one wants to spend the rest of his life sitting on a mountain of debt and get debt accumulation again and again.