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Published on: 21 Apr 2017 by jennifertay
At some point in our life we suffer from financial crisis and seek loans but many are confused about weather they should choose a bank or a legal money lender. Many face this confusion about weather they should approach bank or a moneylender. Generally poor people who live in villages and do not have access to banks choose local moneylenders for borrowing money because of many reasons. They are illiterate so they do not know much about the higher rates moneylenders charge and those who know about them even they are manipulated by moneylenders as they feel helpless. One of the reasons for approaching local moneylenders is that they think moneylenders will not cheat them. The educated lot prefers bank over moneylenders as they are aware of the facilities and ease of repayment. Now the question arises which is better licensed moneylender or a bank? The answer lies within this article.
Bank or legal money lender?
Moneylenders are those people or a group of people which give personal loan with a higher interest rate than Banks. In most cases the reason for higher rates is justified by telling about the market risks involved. They are helpful for those people who do not have access to bank due to distance from bank or bad credit history. They are approached by those who do not have a collateral to provide to while applying for a loan in the banks that’s the reason why many people don’t mind higher interests they are charged. Many times people get fooled and they fall in high debts. Even though getting loan from a moneylender is easier then that from a bank yet there are many risks involved. One of them is the unmodified change in interest rates. Moneylenders increase their interest rates without notifying their customers. Many times when people fail to pay back their money they adapt threatening techniques to get their money back. All these things make us doubt taking loans from moneylenders in spite of the laws for moneylenders.
many cases moneylenders are found useful but in many cases their customers are unsatisfied by their interest rates and modes of repayments. While they charge higher rates than bank people have to accept it even though they are against it. It can be said that undoubtedly banks will be a better choice rather than moneylenders as there will be no chance of double crossing the customer. If in case the customer fails to make repayment then by proper communication issues can be solved while this would be possible with moneylenders. It can be said that banks are clearly a better choice then legal money lender.