A Singaporean’s Guide to Getting a Personal Loan from Licensed Moneylender in 2019

As one of the most expensive cities in the world, Singapore’s high living standards often cause financial difficulties for many of its residents. That’s why people often turn to personal loans to help them cover and manage their expenses and debts. One of the most common places Singaporeans get loans is a bank. But not all personal loans are created equally. In fact, getting a personal loan from a licensed moneylender often turns out to be a great alternative to bank loans.

Here’s why:

1. Well-Regulated Industry

While the moneylending industry is nascent in comparison to Singapore’s banking industry, it is a well-regulated industry to ensure borrowers have safe access to personal loans. Thanks to recent legislative changes in the moneylending industry since 2015, Singapore’s moneylending industry is well-developed. It’s thoroughly regulated by the Registrar of Moneylenders under the Ministry of Law (MinLaw). Lawmakers also established The Moneylenders Act and Rules in 2015 to govern the regulation for moneylenders in Singapore’s moneylending industry.

Lawmakers also established the Moneylenders Credit Bureau (MLCB) in 2016, which helps moneylenders make informed decisions about borrowers before providing them with a personal loan. The MLCB also restricts the amount of money licensed moneylenders can lend you and requires moneylenders to participate in debt assistance schemes.

These debt assistant schemes prove beneficial as it can help you better manage your debt if you’re unable to pay it down. Moneylenders must incorporate their businesses, too. These tactics help reduce the risk for moneylenders while helping you better manage the amount you can pay back safely. It also helps ensure you have safe access to personal credit and that moneylenders are lending you money responsibly. As a result of the thorough regulation of the moneylending industry, the licensed moneylenders have robust credit policy models.

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2. Speed

If you need a personal loan as soon as possible, then a licensed moneylender can come in handy. That’s because licensed moneylenders often focus on smaller volumes of loan application that traditional Singaporean banks do. While you may have to wait days to get a personal loan from a traditional bank, you can often get a personal loan from a licensed moneylender faster. Moreover, many of today’s licensed moneylenders are technology-focused and use modern tools, platforms and business models to help expedite the process.

3. More Flexible Credit Profile Evaluation

Similar to traditional banks, moneylenders must evaluate your credit profile to determine if you qualify for a personal loan and the amount they can lend you. However, traditional banks often have more stringent evaluation procedures than licensed moneylender that can make it more challenging to obtain a personal loan.

On the other hand, licensed moneylenders are more flexible when assessing your credit profile. For example, if you have had a not-so-stellar credit profile, you may not be able to get a personal loan from a traditional bank whereas a moneylender may be more forgiving and provide you with access to a personal loan.

Moreover, expats or foreigners who work in Singapore can get access to personal loans from licensed moneylenders. However, Singapore’s traditional banks often require you to have citizenship or be a permanent resident to get a personal loan.

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4. Small-Loan Focus for Better, Quick Access

Traditional banks in Singapore can offer large amounts for personal loans. However, licensed moneylenders personal loan lending limits are more focused on smaller loans. The advantage to a small-loan focus is that you can use these types of loans to pay for bills that you need to pay quickly.

For instance, if you need help to cover your rent or repair for your car, then you can use a personal loan from a moneylender. Traditional banks also offer small loans, but it may not be as accessible as it can be with a licensed moneylender, especially if you don’t have an ideal credit profile.

5. Lower Income Requirements

Before you can borrow a personal loan, you have to meet income qualifications. Traditional banks will require proof of income, such as your tax return or pay slip. While you can typically get tens of thousands of dollars for your personal loan from traditional banks, having low income can keep you from getting the personal loan you need. That’s because traditional banks often require you to have more income than licensed moneylenders do to qualify for a personal loan.

For instance, licensed moneylenders can grant up to SG$3,000 if you make less than SG$10,000 a year. Foreigners who reside in Singapore with the same yearly income can borrow up to $1,500. However, most traditional banks require you have at least double this amount and foreigners require even more income. So, getting a personal loan with a licensed moneylender is often easier than getting one from a traditional bank when it comes to meeting income qualifications.

Final Thoughts

When you are looking for ways to obtain a personal loan, it’s important to consider your options for the various types of loan providers who can help you get the loan that you need. While traditional banks have long been the go-to loan provider that residents of Singapore seek, these financial institutions aren’t the only option. Instead, evaluate your needs and financial situation, and consider the advantages licensed moneylenders bring. By taking advantage of a licensed moneylender that offers more favorable lending options, you can have a better chance of getting the personal loan you need.