The advantages of borrowing from a licensed moneylender are notable, mostly when weighed against unlicensed lenders or channels of informal borrowing.
Licensed money lenders are common nowadays since they provide quick, easy, and safe ways of borrowing.
Therefore, in this post, we’ll discuss why loans availed through a licensed moneylender are probably the best option for meeting immediate needs.
Advantages of Borrowing from a Licensed Moneylender
The following are reasons you should opt to borrow from a licensed moneylender.
1. Speedy and ease of access to credit
The main benefit of borrowing from licensed money lenders is speeding up the loan approval process. While conventional banks take at least a week and sometimes even months, with strings of stringent credit checks for application and processing, licensed moneylenders make it hassle-free for borrowers needing access to money.
Licensed money lenders often approve loans daily or within a few hours, making them suitable for emergencies like emergency medical bills.
Notably, the documentation required is minimal, and the eligibility criteria are relatively lenient, opening a big spectrum for borrowers. This, in particular, is critical since it considers applicants who have either poor credit history or are self-employed and cannot satisfy the requirements set by banks.
2. Clear-Cut and Regulated Terms
Government agencies regulate licensed moneylenders to ensure they work within rigid ethical and legal guidelines. In this aspect, supervision saves the borrowers from certain unfair practices of the lenders, such as extremely high interest rates or hidden fees, which are the case with unlicensed lenders.
Importantly, in the case of licensed moneylenders, everything has to be clearly explained to the borrowers in terms of conditions and terms, including interest rates, repayment schedules, and additional fees. This calls for transparency in disclosing all information to the borrowers to allow them to make full and informed decisions regarding everything in the loan before signing any agreement.
The regulatory oversight further ensures that the rates charged by licensed moneylenders are not unsubstantially high. This minimizes the chances of finding oneself in situations where they have unmanageable debt from a particularly licensed moneylender, which is hugely reduced since the licensed moneylenders bind one to practical and reasonable loan terms.
3. Flexible Repayment Options
Most licensed money lenders will have a customized repayment plan for each person’s financial situation. This makes it easy to catch up with the payment schedule without penalties. Such flexibility is most welcome to those whose monthly revenues fluctuate or those with other financial responsibilities.
Mainly, licensed money lenders realize that life is full of uncertainties and events that may happen that may hamper the ability to service the debts from the borrowers’ side as initially anticipated. They accommodate such eventualities by allowing variations in the repayment terms where necessary, which minimizes the chances of defaults and enables the borrower to retain a good credit record.
4. A Licensed Moneylender Protects the borrower’s privacy
Another good thing when dealing with licensed money lenders is how they can keep their customers’ information confidential. Mainly, they are legally obliged to ensure that any personal information they have on borrowers is not disclosed.
This privacy aspect adds another level of safety and security in that one is comfortable knowing one’s financial information will not be compromised and/or leaked to unauthorized people. The strict privacy policy also makes the borrowers feel secure while dealing with licensed moneylenders.
Conclusion
The above advantages of borrowing from a licensed money lender make them most preferred in situations of short-term financial assistance. Borrowing from a licensed money lender is safe and reliable, making it much easier for a borrower to face financial hardships with much more confidence.
Lastly, if you are looking for a convenient money-lending alternative option, you can contact us.