Why Do Some Borrowers Prefer Money Lenders Over Banks?

In the dynamic financial landscape of Singapore, a captivating trend has emerged—a growing number of borrowers are opting for money lenders instead of the traditional banks. It’s a fascinating phenomena, no doubt about it.

Have you ever wondered what draws these borrowers towards money lenders? Today, we embark on a journey to unravel the reasons behind this preference, shedding light on why some borrowers in Singapore are gravitating towards money lenders over banks. 

Get ready for an insightful exploration of this borrowing paradigm that will unveil the allure behind this rising trend.

The Singaporean Borrowing Landscape

Let’s start by setting the scene and getting to know how borrowing has traditionally worked in Singapore. For ages, banks have been the go-to choice for loans, acting as strongholds of financial stability and trust. However, things have taken a turn with the emergence of money lenders, offering borrowers an alternative route for their borrowing needs.

Accessibility and Inclusion: Opening Doors for Borrowers

One major reason why borrowers are gravitating towards money lenders is the accessibility and inclusivity they offer. Unlike traditional banks, which often have strict criteria for eligibility, money lenders are more flexible and accommodating, catering to a wider range of borrowers. 

This inclusiveness is particularly important for individuals who may not meet the rigorous requirements set by banks, such as those with lower credit scores or less established financial histories. Consequently, money lenders provide a viable option for these borrowers, bridging a gap in the lending market.


  • Bank: When it comes to borrowing, traditional banks have stringent eligibility criteria, making it tough for individuals with lower credit scores or less established financial histories to qualify for loans.
  • Licensed Money Lender: Money lenders, on the other hand, have more lenient eligibility criteria, making them accessible to a broader range of borrowers. This includes those with lower credit scores or less established financial histories, who may find it difficult to secure loans from traditional banks.

Speed and Convenience: Getting Funds Faster

In today’s fast-paced world, time waits for no one. That’s where money lenders step in, offering a swift and convenient solution for borrowers. Unlike traditional banks, who often have lengthy approval processes, money lenders have streamlined their procedures to ensure speed. This means borrowers can get their hands on the funds they need in no time, which can be a real game-changer during urgent situations.


  • Bank: Traditional banks usually have longer approval processes, causing delays in fund disbursement, especially when time is of the essence.
  • Licensed Money Lender: Money lenders prioritize efficiency and have simplified their processes, allowing borrowers to receive funds quickly, even in urgent situations.

Less Stringent Requirements: A Second Chance for Borrowers

Life has its ups and downs, and sometimes our financial situations reflect that. If you’ve had credit troubles or faced financial setbacks in the past, getting a loan from a traditional bank can be quite a challenge. However, money lenders understand that your credit history doesn’t define your financial potential moving forward.


  • Bank: Traditional banks place great importance on credit scores and may hesitate to lend to individuals who have experienced credit issues or financial setbacks.
  • Licensed Money Lender: Money lenders take into account your current circumstances and your ability to repay the loan. They offer a second chance to borrowers who have faced credit issues or financial setbacks in the past.

Interest Rates: Finding the Best Fit for Your Situation

Another aspect that influences borrowers’ preference for money lenders over traditional banks is the advantageous interest rates offered by licensed money lenders. While interest rates can fluctuate based on various factors, it’s worth exploring the options available.


  • Bank: Typically, traditional banks provide loans with annual interest rates ranging from 3.5% to 11%. These rates are generally charged on a flat basis, remaining constant throughout the loan period.
  • Licensed Money Lender: On the other hand, licensed money lenders offer a compelling alternative. They may charge interest rates between 1% and 4% per month, which translates to a higher Annual Percentage Rate (APR) when calculated annually. Although the monthly rate might seem higher, it’s essential to consider the flexibility and accessibility that licensed money lenders provide.

Repayment Period: Balancing Your Financial Commitments

When it comes to borrowing money, finding the perfect balance with repayment periods is paramount. It’s crucial to consider the duration you’ll have to repay the loan and how it aligns with your overall financial commitments. Now, let’s take a closer look at the available options in Singapore.


  • Bank: When it comes to larger loan amounts, traditional banks usually offer longer repayment periods that can extend up to five or seven years. This longer duration allows borrowers to spread out their repayments over a more extended timeframe, resulting in smaller monthly installments.
  • Licensed Money Lender: On the flip side, money lenders typically provide shorter repayment periods, usually up to 12 months. These shorter terms are better suited for smaller loan amounts, enabling borrowers to repay their loans more quickly.

Comparison of Licensed Money Lenders and Banks

To better understand the differences between licensed money lenders and traditional banks, let’s take a closer look at some key aspects:

AspectsLicensed Money LendersBanks
Minimum Age Requirements18 or 21 years and above21 years and above
Interest Rates1-4% per month3.5-11% per annum
Repayment PeriodUp to 12 monthsUp to five years or seven years 
Borrower Evaluation TimeLess than 30 minutes3-5 working days
Credit Score ImportanceBorrowers with bad credit scores are welcome to apply.Borrowers with good credit scores are preferred.

By referring to the table above, it becomes evident why borrowers are leaning towards licensed money lenders. These lenders boast lower age requirements, more manageable monthly interest rates, shorter repayment periods, quicker evaluation processes, and a willingness to consider borrowers with less-than-perfect credit scores. These factors make licensed money lenders a more accessible and flexible option for borrowers in Singapore.

Conclusion: Giving Borrowers Options and Empowering Them

In a nutshell, the emergence of money lenders in Singapore’s borrowing landscape reflects a shift in thinking driven by convenience, speed, flexibility, and inclusivity. While traditional banks continue to have a strong influence, money lenders have emerged as a practical alternative for borrowers facing limitations within the traditional banking system. 

If you’re looking for a licensed money lender, Accredit Moneylender is the perfect choice for you. We provide hassle-free loans for individuals in urgent financial need. Take the initial leap and submit your application today.

Awarded by Ministry of Law to operate a new Pilot Programme, we have been providing transparent and quality service since 2002.


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