Money is the most important thing in the economy for survival or obtaining the means to live. Money is the most important weapon which is used by an individual to cater to his financial needs and gain independence in his life. It is to be noted that money provides independence and freedom to the individual. No individual is self-sufficient in terms of credit facilities. They need help from a third person. So that third person can be banks, financial institutions, relatives, friends, moneylending companies, etc. Now an individual should choose from where he wants to avail the credit facility. Each type of credit facility provider has its own benefits and limitations. This article provides a general overview of the role of money lending companies.

What is a money lending company?

Money lenders are generally individuals or small groups of individuals who provide short-term credit to small sections of society at a high rate of interest to the borrower. It is to be noted that the rate of interest on loans is way higher than the banks and other financial institutions because the risk involved in granting loans is relatively high. The method of giving loans by money lending has existed since time immemorial. But now it has taken a more formal sense. Money lending companies are now officially licenced by the relevant authorities and can begin providing finance. For more information click best money lender in toa Payoh.

The Function of a Money Lending Company

It is correctly stated that an individual can need finance for a variety of purposes. Initially, an individual’s only sources are relatives, friends, family, and banks. But people do not prefer to take loans from family and friends owing to trust issues etc. Banks provide loans at a low rate of interest, but there is high documentation, so it basically creates a gap between an individual and their financial needs. With the emergence of money lending companies, now people can approach these companies and get their financial needs fulfilled because they provide quick loans and do not concern themselves with much documentation and formalities, which is the plus factor of money lending companies.


Money lending companies are the great source of people who cannot approach the banks and financial institutions to fulfil their financial needs. The borrower can get the loan from a money lending company easily because it does not require many formalities or even collateral security. As a result, money lending companies aid in the facilitation of credit facilities in the economy by providing loans to the underserved segments of society.