As we all know, credit is the essential need of the individual to achieve their goals in life. It is correctly stated that a person can run at any time for fun or finance. So, to cater to his financial needs, he needs someone to help him run through his difficult times. So, in these difficulties, an individual can avail loans from financial institutions, banks, online peer-to-peer lending, licenced money lending companies, etc. Money lending companies are basically in the informal sector that fulfil the credit needs of an individual in a smooth and effective manner. This article provides a general overview of the pros and cons of the money lending company.
Benefits of a Money Lending Company
There are various advantages of taking a loan from a money lending company. It is a well-known fact that a large marginalised section of society depends on money lending companies to fulfil their financial needs. People prefer to avail loans from money lending companies owing to their benefits. Money lending companies provide loans for a longer duration as they are unregulated by any concerned authority and it helps in reducing the monthly payment for payback. For availing the best credit facilities click best money lender in toa Payoh.
Another significant advantage of money lending companies is that they can provide loans faster than any other financial institution. The rationale behind this is that they were not concerned about much documentation and formalities, leading to the approval of the loan much faster. Even so, some money lending companies provide loans without any collateral security. As a result, an individual can obtain a loan without jeopardising his or her security with any institution.
The disadvantages of a money lending company
It is a well-known fact that each thing has its own benefits and limitations too. Aside from the fact that money lending companies offer quick access to loans, we cannot ignore the fact that they charge a higher rate of interest than banks and financial institutions. Another drawback of obtaining a loan from a money lending company is that they are not regulated by any authority and there are no per se laws on these companies, which essentially indicates that they can conduct their business in whatever manner they want. There is no appropriate authority in the event of any default on the part of the money lending company.
Money lending companies are a ray of hope for those people who cannot approach the banks. Considering its advantages and disadvantages, we can clearly see that it is beneficial to take credit facilities from money lending companies as they do not require much documentation and approve the loan quickly.