Your alternatives are shifting with the globe. Not just banks. Private lenders provide fast, low-interest loans. These are wonderful deals, but money lenders’ high interest rates make personal loans uncomfortable for some. Yet, banks are sometimes more costly than expected, despite their reputation as safe havens for loan seekers. Which should you pick? We’ve answered some typical decision-making questions.

Bank loans vs. money lenders in Singapore

Borrow money from banks or moneylenders. Banks’ lending programs involve large down payments, processing fees, and other hidden expenses. Your bank may require monthly or quarterly interest payments. Money lenders have high interest rates yet don’t need documentation, making them easier than bank loans. But, they may ask collateral from you to issue the money required by yourself or your business partner/friend/family member who requires urgent cash owing to unanticipated situations like medical expenditures, the loss of someone close, etc. Unlike bank loans, which need Income Tax Returns (ITR) verification and Bank Statements (BS) proving savings account balance, the process is short since there are no long application paperwork.

Singaporeans may borrow from banks and regulated moneylenders.

Banks are governed by the central bank, hence they are subject to several regulations. These guidelines are established by the MAS, which also ensures bank compliance. Singapore’s Moneylenders Board, which contains regulations that all registered moneylenders must abide by, oversees the country’s licensed moneylenders.

Banks are infamous for their high-down-payment loans.

Loan applicants should be mindful of processing fees, high down payments, and other hidden expenses. Bank loans have these properties. Bank loans in Singapore have higher interest rates than money lenders, so be prepared to spend extra. Money lenders, unlike banks, lend based on the borrower’s ability to repay the principal. They don’t require collateral or a guarantor since they provide short-term loans at cheap rates and allow borrowers to clear their debt even after making partial payments over time. Licensees charge outrageous interest rates. Private money lenders must be contacted individually. These private companies may charge whatever interest they choose. Yet, licensed moneylenders may provide lower interest rates if you apply during a market slump or have good credit.

Banks in Singapore

Certain Singapore banks allow partial pre-payments, although they charge. All private lenders allow part payments. Moneylenders allow partial pre-payment.

Time taken by banks to release funds

Banks take longer to deliver cash because everything, from paperwork to loan distribution, must go through a legal process that may take days or weeks. Yet, since financial institutions do not control them, moneylenders are exempt from all the checks and regulations that apply to banks.

Choosing between bank loans and money lenders depends

Depending on your individual financial needs and benefits assessment, you may choose to choose between bank loans and money lenders. Banks provide appropriate loan amounts, flexible payback periods, and competitive interest rates. In contrast, lenders are more likely than banks to provide cash loans with higher interest rates.


Depending on your individual financial needs and a benefits analysis, you may choose between bank loans and money lenders. Bank loans are less expensive than moneylenders but still come with significant down payments and hidden fees. Money lenders offer lower interest rates, but the repayment terms are shorter, and the monthly instalments are larger. however as a result, before choosing your loan possibilities, you must take everything into account.