Finance Help

Daily Archive: September 5, 2018

Lenders and Borrowers. Do You Know These Two Figures?

Often the figures of singapore moneylender and borrower commonly incite error. It is therefore not complicated to confuse both terms and enter a loop in which you do not know very well who is who. It is for this reason that today we want to explain everything about money lender and borrowers so that after reading this post, we will be able to clarify each and every one of the doubts that may arise.


Lenders and borrowers Who is who?

When we are faced with commercial loan contracts, the first thing we need to know before going into detail about the clauses contained in the contract itself, is who are the natural or legal persons that personalize both the borrower and singapore moneylender.


The lenders

If we talk about lenders , we refer to all those individuals or legal entities whose purpose is to facilitate access to the loan with their own funds or from the entity acting on their behalf (as in the case of financial and banking entities). To carry out this operation, the moneylender charge a certain interest rate in accordance with the risk that the operation in question may have – since, as we can imagine, it is not the same, for example, to grant a loan to a start-up company that to a company that has been acting in the market for a certain time.


Lenders can offer various types of loans or loans:

Soft loans: those granted by official credit agencies and international financial institutions to developing countries, sectors within the national economy that are experiencing crises or investments of high social interest. They are characterized by being granted by moneylender in the long term and at a low interest rate. Actually, because of the characteristics they show, these are covert subsidies.

Single-signature or unsecured loans : they present a very high interest rate and a much shorter period of time than soft loans. This is because there is no real guarantee that ensures the return of the amount to the moneylender.


Types of Lenders

Although we think no, there are more than one and two types of lenders. If we divide them according to the commercial relationship we find commercial lenders (banks and financial entities) and individual lenders (those who lend money outside a credit institution), however, in general we find the following types:


Bank lenders : this is one of the types of lenders most known to all of us. Banking lenders are consolidated entities that offer economic “facilities” to their customers and that require change, to meet a series of requirements, which in many cases makes it difficult to access them.


Lenders of individual type : they are those lenders that, unlike the banks, do not require so many requirements. Thus, for individual lenders to grant a loan, it is only necessary to provide a guarantee that can guarantee the payment of the loan. They tend to be people who, generally, work individually for small amounts.


Alternative financing lenders : In this case, they are platforms such as MytripleA, which act on behalf of different individuals (investors who fund the projects collectively), granting the financing requested by the company. This allows the development of loans between individuals .


Lenders: main features

So, all those who lend their money become directly lenders? Yes, and no . We say this because it depends on whether the amount that is actually lent is going to be lent or, on the contrary, given without waiting for its return.

One of the fundamental characteristics that make the lender is that he must have a loan of temporary assignment . This means that the money must be returned in the future with or without interest (as stipulated by both parties). In the event that there is no such obligation of future refund, there will be no legal relationship and therefore, there will be no legal loan agreement, nor will the figures of lenders and borrowers appear.

Therefore, the remuneration is not what determines the existence of the loans nor of the borrower and lender. To clarify it even more we are going to give you a very simple example: if we leave a bicycle for a few days to a friend because he needs it and we do not charge him absolutely any money, we will be, in any case, becoming lenders since our Friend will have the future obligation to return the bicycle.


Borrowers, the flip side of the coin

If we look at the literal meaning of the borrower granted by the RAE, we see that it refers to the ” borrower “. This, developed a little bit more, refers to the person who owns a loan , so the borrower assumes all the obligations and acquires all the rights of the loan contract that he signs with the natural or juridical person in question that is made up as a lender.