Financial borrowing is rarely enjoyable. The difficulty of acquiring from a moneylender may be increased. Many people, both in urban and countryside areas, turn to independent money lenders because the formal loan process is constrained by a number of norms and restrictions. As long as a country does not attain full financial integration, it will be difficult to ignore the enormous market for informal money lending.
Hence, here are few things to consider before you ever proceed with borrowing money.
- License
Every nation has a Money Lender’s Act that mandates licensing for money creditors in an effort to regulate the industry. Regrettably, the majority of them really not register and might engage in unethical behaviour. Find a licensed money lender because of your own security when you wish to take funds. Services from the best money lender in Ang Mo Kio fulfil the licensed accreditations to be trusted.
- Interest Rate
Make sure you understand the total cost of any arrangement before you sign anything. Depending on the payback plan, the actual expense will vary for a given interest rate and loan quantity. Remember that paying narrower instalments will reduce your overall cost versus paying smaller sums more regularly.
- Additional Charges
Make careful to inquire about any additional fees that the lender might charge you. It is common for them to impose late fees, pre-closure fees, and in some cases, a punishment for a returned check. It will be wise to obtain all of this in writing in your contract and to declare that there won’t be any additional fees beyond those that are specified there.
- Alternate Options
Make sure you’ve tried all the official channels for obtaining credit. You can obtain credit via NBFCs, financial entities, virtual platforms that enable peer-to-peer borrowing, as well as different mobile apps, in addition to personal bank-issued loans. Some of these methods are absolutely hassle-free and don’t need a lot of paperwork.
- Loan Recovery
Some providers of capital use loan sharks or debt collection agents. When payments are late, these have the option of using physical force. This can be extremely upsetting and dangerous for you and your family. Find out how they recoup defaulted loans from them and check if they can include that in the contract. Before knowing a money lender, always seek for referrals or a person who can attest to their character.
Check the things, consider them as per your situation and proceed with borrowing!