Many of us occasionally need quick financial help to manage unexpected expenses. In such cases, we would typically apply for a quick loan from a reputable bank or private money lender in Singapore.
Banks are usually the preferred option, but licensed lenders —focused on short-term, private lending— also offer various types of private loans to individuals and businesses, just like banks. This makes them a great alternative for people in dire need of extra funds. This is significant especially for those looking for fast loan approvals.
While there are some differences between loans from money lenders vs banks, their key similarities are:
- both charge interest on your loan
- both charge penalties for late payments or defaulting on the loan
When it comes down to it, your choice of loan provider depends on your financial circumstances and needs; and which lender will be able to best meet your requirements.
Loans from licensed money lenders vs banks
Understanding the differences between the two key loan providers from which you can secure a loan is an important step in applying for one. This table covers all the main points to consider before you decide which option suits you best.
| Money lender | Bank | |
| Loan amount |
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| Loan approval |
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| Loan tenure or term |
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| Loan eligibility and creditworthiness |
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| Annual income below $20,000 |
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| Criteria and documentation for Singaporeans and PRs |
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| Criteria and documentation for foreigners |
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| Interest rates |
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So, which is better when it comes to money lenders vs banks?
After looking at the above table on money lenders vs banks,, you may still feel stuck and not know which to choose.
Well, the answer depends on how much money you need, how urgently you need it, and whether or not you can qualify for loans from banks.
Reviewing a complete list of legalised lenders in Singapore and available loans from banks can also help you choose what’s best. With different attributes and limitations, banks and money lenders have their different advantages.
Therefore, before moving ahead with either of these options, it is essential to determine your requirements by considering the many types of personal loans available.
Here’s a general guide to help make a more informed decision:
Go with a bank if:
- You need a large loan for big purchases such as a car or a house.
- You need a longer tenure to repay since the maximum tenure banks offer is up to 5-7 years.
- You don’t need money urgently, since banks have a slower process.
- You have a good credit history as banks have lower interest rates.
Go with a money lender if:
- You require a relatively small amount to fulfil an emergency.
- You need cash fast since money lenders can approve loan applications within an hour.
- You have a low credit score or you’ve been rejected by banks multiple times when applying for a loan.
Both banks and money lenders have their own set of pros and cons. The best option for yourself ultimately depends on what your financial needs are, as well as your eligibility.
Consider Cash Direct if you need a loan, fast
If what you’re ultimately looking for is quick cash, speedy loan approval, and relatively less strict eligibility requirements — a money lender may be the better option.
At Cash Direct, we have a team of friendly loan officers and consultants who are more than happy to help you better understand how our loans work and guide you through the loan approval process smoothly. Also, as we’re a Jurong East money lender that’s a mere 5-minute walk from the MRT station, you’ll be pleased to know that getting to our office is a piece of cake.
Contact us today and we will have a loan expert take you through all the available options suitable for your needs. Alternatively, hit the apply now button if you already have a loan in mind!
