A financial crisis can hit anyone any time of the day. It may be a sudden medical need, a special occasion, or simply running short of money in the middle of the month. Having to arrange finances in an emergency can be a highly stressful situation.
In such cases, a licensed moneylender can be extremely helpful. This is the best way to get a quick financial loan during emergencies, as traditional loan methods might take a lot of time to be processed.
Let us find out who money lenders are and what benefits one has when taking a loan from them.
Who is a money lender?
As the name suggests, money lenders are people or institutions that lend money. They are permitted under law to give loans at a reasonable interest rate. It is important to check if a money lender is licensed before going ahead with the loan. Legit lenders will showcase their credentials on their official website or in their offices.
Taking a loan from an unlicensed lender can cause serious trouble. They may turn out to be loan sharks that lend you at a sky-high interest rate, making it difficult for you to repay.
Why take a loan from licensed lenders
Registered money lenders abide by the law and make it easy for people to get loans. They will check your financial history and credit score before recommending the type of loan suitable to you. The most significant advantage is that it is easy to get a loan from such lenders even if your credit score is tiny.
Also, the online loan application process is quite simple. It is generally reviewed and processed within a day of the application. Following are some other benefits of taking a loan from a licensed moneylender.
- Faster loan approval
Licensed lenders can process loans in a day and sometimes even less. They check your finances, credit history, and other details at a fast pace and hand over the loan amount as quickly as possible. The reason for this is that, usually, people take small amounts of money for emergencies. The lenders understand this urgency, and it makes it easy for them to expedite processing the application.
- Greater flexibility
One of the biggest advantages of taking loans from a money lender is that there is no limit to the loan amount. For instance, some lenders will let you borrow up to four times your annual salary. This is especially useful if you have encountered unforeseen losses at the workplace and need a quick business loan. For easy repayment, though, it is better to take only the required amount and not extra.
- Lower interest rates
Taking a loan from a licensed lender will ensure you have a lower interest rate, lightening the burden of loan repayment. Since their activities are regulated by law, such types of money lenders do not charge exorbitant interests. They stay within the legal limit and ensure that it is easy for you to return the money. On the other hand, unlicensed money lenders will charge very high interest rates that can make repayment difficult.
- A legitimate process
To obtain a money lending license, all lenders need to pass an exam. Only when they pass it successfully will they meet the criteria to hold a license. When this is done, they begin to operate within the government’s laws and regulations. This protects customers from being scammed by unlicensed lenders. You can visit their office rather than just browsing their website for greater assurance.
For all the above reasons and more, many people are turning to licensed moneylenders over the years. It is an incredibly consumer-friendly way to obtain finances in urgency. It eliminates the need for long queues and a lengthy application process that most other financial institutions function by.