Money is the most important need for an individual for starting a new business, funding the education of a child, renovating a home, etc. It is correctly stated that not all individuals have sufficient capital to fulfil all their needs. Therefore, credit facilities play an important role in mobilising money from rich people to needy people. There are both pros and cons to availing credit facilities from banks and other financial institutions. Other reason is that the banks and financial institutions is that they are unable to reach to the poor and rural section of the society. In these cases, money lenders play a vital role in mobilising credit in the rural and poor sections of society. This article provides a general overview of the effects and benefits of availing credit facilities from money lenders.
Benefits of taking a loan from a money lender
People tend to turn to money lenders for the fulfilment of their credit requirements. One of the most important benefits of taking a loan from a moneylender is that they provide small loans to needy individuals at a lower rate of interest than banks. There is a myth that money lenders provide loans at a higher rate of interest than banks, but that’s not true. Money lenders offer the amount of the loan at a low rate of interest because there is cutthroat competition going on between various money lenders. Money lenders provide different types of loan services, like personal loans, home loans, and business loans, under one head, so it is easy for an individual to choose which type of loan is suitable for him. For more information click best money lender in toa Payoh.
People will prefer to take loans from money lenders as they get the amount of loan usually immediately or on the best day of application of the loan. Banks will not provide the loan if the individual has a bad credit record, but money lenders advance loans to those people who also do not have a good credit score. The repayment method of money lenders is also flexible, as they can agree on paying in a lump sum or even in installments. This helps the poor people repay the loan in an effective manner.
Money lenders play a vital role in providing loans and other credit facilities to people. There are many benefits to taking a loan from money lenders, as they provide loans quicker and do not require any collateral security.