Be it a bank or a licensed\nmoneylender, both share one thing in common: they want to make sure that you’re\nable to pay them back if they give you a loan. This is called assessing your\ncreditworthiness, and it’s usually done by looking at a few different things.\nFirst, they may look at your pay slips to ensure that you have a stable income\nthat you can use to pay them back with. Then they may even look at your credit\nscore since that’s a clear indicator of how well you manage the credit you\nalready have. <\/p>\n\n\n\n
The process for getting a personal loan approved by either a bank or a lender can be quite different between the two, and we’re going to see why.<\/p>\n\n\n\n Getting A Personal Loan from A Bank<\/strong><\/p>\n\n\n\n Big banks are recognized and\ntrusted. So for most people, that’s the first place they look when they need to\nsecure a personal loan. This can be a good idea since banks are usually able to\nprovide you with higher amounts of financing and for much longer terms. Banks\ncan afford to do this because they make their profits from many different\nfinancial products that they offer to customers, not just with personal loans.\nThis fact also means that banks can afford to take more time when looking at\nyour creditworthiness and in deciding whether or not they want to approve your\napplication. You might end up waiting a little longer before you find out\nwhether or not they’re going to give you the funds you need. Since there’s a\nbit of a waiting period involved, banks may not be ideal for you if you need\nthe money urgently.<\/p>\n\n\n\n What About Licensed Moneylenders?<\/strong><\/p>\n\n\n\n When it comes to licensed moneylenders, the dynamics are slightly different. Lenders tend to focus their business on only one thing: giving out personal loans. Because of this, they may not be able to give you as much financing as a bank would. Even if they could, they’re also required by law to only give out loans up to a maximum amount. On the plus side, they may not be as strict as banks when it comes to approving loan applications. After all, since their business is focused only on lending, they need to give out loans to survive. Since they’re less stringent when determining your creditworthiness, they may approve your request much faster than banks would. For all of these reasons, lenders are a good option if you only need a small loan and you need it quickly.<\/p>\n\n\n\n Don\u2019t Go to Loan Sharks or ‘Ah Longs’!<\/strong><\/p>\n\n\n\n When it comes to lenders though, you\nneed to be extra cautious. No matter how desperate you may be for money, it’s\nnever a good idea to go to an unlicensed moneylender. Also known as loan sharks\nor ‘Ah Longs’, they operate illegally and charge interest rates so high that\nborrowers find it impossible to pay back. Every few months in local newspapers,\nwe see many horror stories of people who suffer from their collection tactics\nlike intimidation and blackmail. <\/p>\n\n\n\n So why do people still go to loan\nsharks? Some people go to loan sharks out of pure desperation, needing the\nmoney but having nowhere else to get it. However, there are sometimes when it\nis actually quite unclear if a moneylender is licensed or not. This is why you\nmust always do your research on the lender first. Check their background and\ntheir reputation to know whether or not they’re legitimate.<\/p>\n\n\n\n![\"\"](\"\/\/ctoscredit.com.my\/creditfinder\/wp-content\/uploads\/2019\/10\/iStockphoto-818106054.jpg\")
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