Sometimes sudden situations happen where people are stuck in financial crunches and look for favourable solutions. To help out people in such situations, there are many institutions which provide loans to fulfil their financial needs. These loans can be granted by governments, individuals, banks, private institutions, etc.
Institutions or individuals who lend loans are known as money lenders. These are usually private sources who lend a small amount of money and as they are private individuals, they face more chances of risking defaulting in repayment as compared to banks and other non-private institutions, this results in loans at a very high rate of interest. People in urgent need of a sum of money who didn’t get loans from banks or friends, relatives, etc. appeal to these money lenders. In foreign countries, there are licensed money lenders as there are best licensed money lender in Philippines.
What is a Money Lender License?
Dealing financially with private sources increases the risks of scams on the borrower’s side as well, and to mark this, the government amended the Money lenders act, of 1957, in various states. Under this act, it was made mandatory for every money lender to have a license.
The issuing process of a money lender license usually takes 3-4 months from the submission of your application. There are some constituents that are considered before approving a money lenders license. These are:
Ability to run a money lending service
Before approving the officials assure your competency that whether you can handle money lending at a larger aspect or not. It will ask you to have some minimum requirements as per the rules.
Place where the money lending business will be set up
It is important to you to have apt premises suitable for the money lending business, where people can comfortably come and easily access the services.
Consideration of Public Interest
As this money lending business will be between the public it is necessary to be ensured that there is no such approval which results in disagreement with the public.
After these considerations, approval of a licensed money lender requires few and simple documentation for the final procedure. They are:
- Application form
- Photographs of passport size.
- Signatures at 3 places with the money lender’s name. you can also provide the money lender’s nominee’s name.
As more people have been opting for different types of loans for their personal and professional uses, the licensing becomes an important aspect. It allows to keep a record and makes the financial relationship between borrower and lender more trustworthy for each side. Applying for a license is an easy process with simple documentation, you just need to fulfil the considerations for the final approval of the money lender’s license.