Is it wise to borrow money from a licensed moneylender?
Licensed moneylenders are creditors whose services have been approved by the government and just like any running business they pay taxes to the government. They offer us genuine help when we urgently need money; we got no time to apply for a loan and have it processed which could take forever. Licensed moneylender offer loan within the shortest time possible and in return the debtor gives them tangible asset as collateral such as gold, car, land, title deed among others. The value of the collateral is equivalent to the loan applied.
Reasons for a person to borrow money from a licensed moneylender:
1. Security of the collateral
Licensed moneylender ensures they give you back your collateral that acted as security once the loan is repaid as agreed. In this case, the debtor is guaranteed that the moneylender will not temper with the loan security; because they fear being charged in court over bleach of contract.
2. Quick access to money
Licensed moneylender ensures that you access the funds as soon as the loan application is done. The loan is granted when the verification of the collateral is termed genuine.
3. Access to loans for low income earners
The bank and other financial institutes are reluctant on offering loans to low income earners; because of failure to meet the loan payment deadline and loan application requirement. Licensed moneylenders step in in such circumstances and offer loans to low-income earners based on agreement and the loan security available. Contract on the terms of loan payment is formulated and the debtor is credited based on the agreement signed.
4. Licensed moneylender do not have fixed business hours.
Most creditors are never available on weekends and over holidays; therefore not reliable in a case of an emergency. Moneylenders are always working on flexible working hours and they are available anytime you need them.
5. Most licensed moneylenders are located close to their borrowers
Moneylenders mostly started their businesses at home or in an office just close to where they reside. This makes it easy for both the lender and the borrower to keep a close check on each other to ensure that each party is keeping part of the deal.
Licensed moneylender businesses vary depending on the country moneylending business regulation. The government authority conducts regular checks to ensure the moneylenders are genuine and adhere to the set guidelines. Legal moneylenders have proved to be important in the society, since they offer emergency loans to needy individuals.
Licensed moneylenders give you guarantee as a borrower that the business operation is legal and that the borrower is protected by the law in case either party bleaches the contract.