What are the Ways of Lending and Types of lenders?

Types of Loans & Credit: Different Credit & Loan Options

Lending is a part of the business, which cannot be ignored. In general, lending means a temporary transaction of money or property, expecting the person to repay in time with or without the interest. There are different types of lending and lenders available in the market, and a borrower needs to understand each of them before making a deal. 

Who are the Lenders?

A lender can be anyone having additional resources to lend. It can be a person, government, or private institution. Most of the banks are nothing but professional lenders. The interest rate varies from lender to lender and place to place. On many occasions, the government rolls out policies for a fair transaction. The interest amount is inversely proportional to the chances of repaying; therefore, the interest rate is more when the risk is high, and vice versa.  

You can see that most of the financial institutions charge a significantly higher interest rate while lending to start-ups. The reason behind the high-interest rate is the uncertainty of repayment. Therefore, it is very hard to sanction a small business loan from a financial institution. 

A lender is completely different from the investor. Investors generally are the stakeholders of the company. They get additional profit if the company does well and suffered losses if it becomes bankrupt. On the other hand, lenders stay away from your business. Therefore, they will not demand more if you do well, and vice versa. They only want you to return their money with due interest. As a result, a lender does not have ownership in your business. 

Types of Loan

There are different types of loans available in the market. If you are running a business, you must know the types of loans that you can take at the time of your emergency. Here are some of the popular loans that most people take. 

  1. C&I loans for the short term requirement. 
  2. Mortgages Loan for long term investment, like for the real estate.
  3. Vehicle cash loan.
  4. Credit card.

There are multiple lenders available in the market, but you need to choose the right one, according to your needs. There are several factors involved that you need to consider while taking a loan.

  • The Amount of the Loan

The amount is definitely a big factor in deciding the type of lender. If your requirement is big, it is always recommended to go for commercial loans. You can even try out different combinations of commercial loans.

  • Asset Types

If you need a long term loan, you could pledge your assets. Generally, financial institutions accept assets like land and buildings. Even if you have assets like vehicles like cars, you can use them to get a better deal. 

  • Expansion of Your Startup

If you are planning to create a new startup, it is very much difficult to get a loan in Singapore. Only the best moneylenders Singapore will stand beside you. For a start-up, you required to opt for a non-traditional way. But, on the other hand, getting a loan for the expansion of your existing startup is relatively easy. Most of the financial institutions will easily sanction your loan according to your transactions. 

  • Loan Term

The term of the loan is the time you need to repay the loan amount. The duration of the repayment is a big factor, but most people ignore it. You need to choose the lender according to your ability to pay back the required amount of money. 

Types of Lenders Available in the market

Singapore is one of the developed regions around the globe. Therefore, you can find numerous types of lenders in Singapore. But, like other parts of the world, financial organizations like banks and credit unions are dominating the current market. Though they help many of the applicants, not everybody.

In recent times, there is huge progress in different other non-traditional financial institutions. People even consider them as the best Moneylenders Singapore. Here are some of those highly critically acclaimed organizations in Singapore. 

Types of Non traditional Lenders in Singapore

  • Peer-to-peer Money Lenders

Through this money lending process, you can borrow money from other individuals. There are a number of organizations dedicated to the newest for borrowing. 

  • Licensed Lenders

Licensed lenders are becoming popular, like no other financial organizations in Singapore. They got approval from the government to sanction loans for individuals. Their interest rate is quite similar to the private banks. Organizations like CRAWFORT SG are performing well in the country. 

Other than these two, you can lend money from crowdfunding, and other sources as well. 

Do You Really Need a Loan?

Though taking a loan is not a bad thing, it should be the last option of money lending. Financial difficulties are part of life. Financial urgency is a must if you are staying in an expensive city like Singapore. 

Your monthly earning should carry out your scheduled expenditure. Facing a shortage of money at the month-end regularly shows your lack of planning and excess spending in the day to day life. If you are one of them, you need to take measures for cost-cutting, immediately. 

Besides, if you find an urgent situation like emergency health care, child’s education, or friends’ urgent need, you need to take the following measures before applying for a loan. 

  • Ask your friends for help. Try to divide the amount among three to four friends; therefore, it will be easier for them to pay. Once your situation improves, payback their money with a ‘thank you’ note.
  • Family members are the best people to help you out during your emergency. Speak with your family about the matter. If they have financial stability, take help from them.  But, it has seen that many people delay the payback process and take their family for granted. Don’t make such sill mistake, and repay immediately once you have the money. 

If the loan is the sole option remaining, try to go for a reputed financial institution like CRAWFORT SG for the best experience.