What is a Money Lender?
A money lender is generally termed as someone, other than a bank, that lends money to the public. Often people think of these money lenders as all being loan sharks but actually, many of them do not fit that description, although of course there certainly are those that do. The difference basically is that some money lenders are licensed and by being licensed, they can hardly be referred to as loan sharks as they do have to comply with several regulations, including the amount of interest they are allowed to charge for a loan. The real loan sharks are the un-licensed money lenders who do not come under any regulatory controls, meaning they can charge, and often do, extremely high rates of interest, rates which are sometimes hard to meet requiring that the borrower takes out yet another loan at an equally high interest rate in order to finally get themselves out of debt. Although in some countries it is hard to determine one type of money lender from another, in Singapore there is a website which lists all the licensed money lenders. This means that if you live in Singapore and want a loan outside of the banks, you merely have to go to the website and find the nearest licensed money lender.
If there were similar websites in every country, there would be many less people paying exorbitant interest rates than there are now. Although banks are the traditional money lenders and they are perhaps the best as their rates of interest will probably be lower than either type of other money lender, their loans can often take several days to be approved and processed and many people that are seeking loans, need the funds sooner than that and so resort to getting the loan from an outside money lender. It are these people that require a loan in a hurry that have to be careful about who they borrow from as whilst a licensed money lender may offer a reasonable interest rate and workable repayment plan, an un-licensed money lender will probably only offer one high interest rate and too rapid a repayment scheme, leaving the borrower in a heavy debt which they have trouble repaying.
None of us want to have to borrow money but it is a sad fact that in today’s modern financial based lifestyle, all of us probably will have need of a loan at one time or another and it will depend on the reason why we need that loan as to whether we go to a bank for the money or to a money lender but if we do opt for the money lender, we must always ensure that we have opted to go to a licensed one, not an un-licensed one. Loans are often necessary but can often be fairly easily paid back, providing the interest rate on the loan is reasonable and the payback time is suitable to our expected income, two things that are rare if an un-licensed money lender is involved.