Often the interest rates for different types of loans are different but also different rates are charged by the different people you go to for the loan. Banks probably charge the lowest interest rates for most types of loan and their rates are closely followed by the rates charged by licensed money lenders but as un-licensed lenders can charge whatever rate they see fit, their rates of interest are usually far higher than the others and are often extremely high. It for the lower rates of interest that banks charge, why most people in need of a loan will first go to their bank to ask for it. Unfortunately though the banks will usually have strict criteria which must be met in order for a bank loan to be approved and not all of us meet those criteria, not for the amount we would like to borrow anyway. This means that at those times we will have to go to a licensed lender for the next best rates. Sometimes it is not always easy to tell a licensed lender from an un-licensed lender though and so we have to be careful. This is a problem which occurs in many countries but in order to try and address the problem, Singapore have set up the LoanSingapore.sg which lists all the licensed money lenders to avoid people experiencing the difficulty of differentiating between the licensed and un-licensed lenders, perhaps something more countries could do. It is not just because we cannot get a loan approved by a bank that we may opt to use a money lender as sometimes, the urgency with which we need the loan, makes a loan from a bank unacceptable. Because a bank has precise procedures which it must follow in approving and processing a loan, from requesting a loan from a bank and actually receiving the money, if the loan is approved, will usually take several days and that is what is unacceptable in some cases; cases where the money is urgently required on the same or next day. Most money lender’s procedures are much faster than a bank’s and so they can often release the funds for a loan on the same day as the loan is first requested, if of course they approve the loan which they are probably more likely to do than a bank as their rules are not as strict or rigid. The reason why a licensed lender’s interest rates are lower than an un-licensed lender’s is because in order to have a license and maintain the license, a licensed money lender must keep their business dealings within certain regulatory limits and those limits include how much interest they can charge. With no concerns about a license on the other hand, an un-licensed lender will charge whatever rate of interest they want and as the people that usually go to them are desperate for the loan, they rarely complain except for afterwards when they are struggling to maintain the repayment terms.