Have you ever experienced borrowing money from a financial institution and got denied? Where does one turn to? A loan shark perhaps?
In our modern society, there are various associations involved in money lending, but in Singapore their law regularizes money lending. But what is the difference between a loan shark as well as an accredited money lender? Or what makes a Singaporean resident borrow money from a licensed money lender as an alternative to a bank?
Let us define exactly what a loan shark is, before we proceed.
A loan shark is a person who’s into cash lending with extremely high interest rates. Oftentimes, loan shark enforces repayment with all the usage of blackmail or threats of violence.
In Malaysia and Singapore, particularly in Asia, Ah Long is a slang term for loan shark. They provide loans to individuals who are not allowed to get money from any legal institution like banks. Most commonly than not, their goal are gamblers. The interest rate within their unbelievable and illegal money lending company is around 40% a month.
Ah Long will paint or write threats, if a debtor does not pay in time. Typically, the characters “O$P$ will probably be included, which means “owe cash, pay money.” Or the head of pig hangs outside a debtor’s house, which is a way of bullying.
Yes, they’re also in the amount of money lending organization nonetheless the only real difference is – manner.
They don’t do it like Ah Longs do.
Be detained by authorities and they want to make a great standing in cash lending, and would not want to frighten clients.
- Small loans. Cash lending to small entrepreneurs or people who want payday loans or unsecured loans will be the target of the group. Money needed to pay electricity bills, gas fees and receiving your car repaired are some examples. Money lenders that are authorized aren’t a choice for large corporations or companies that need additional funds.
- Faster Trade. In the cash lending business, individuals understand how long the procedure in receiving loans from banks; as they will assess your credit rating. With licensed money lenders, since modest sum of money is involve, your loan could be approved within thirty minutes.
- Credit Evaluation. In the case of licensed money lenders, they’re less finicky about it. The reason to this can be they target people who cannot apply for a bank loan because of credit score that is low or poor. Obviously in any kind of money giving companies, you will find limitations. Money lenders must reject an application if:
- A man has outstanding loan from another money lender
- An individual has a significant or substantial sum charge card debt
You will find times where their wages is just not sufficient to cover all of the invoices.