Loan applications can appear to be highly vague and opaque processes to most of us. Each applicant receives different interest terms, while some are even rejected by the lender. Which brings up questions such as – why do some loan applications get rejected?

When asked to compare banks and money lenders, many of us are often tempted to liken money lenders to the sensationalised loan shark. Indeed, we imagine money lender loans to carry extremely high interest rates, promoted by shady characters and coupled with brutal debt collection methods. However, this could not be further from the truth for the licensed money lenders that we refer to in this article.

Have you ever heard of the phrase, “it takes money to make money”? To a large extent, this is true as you reap higher returns from larger investments. And so, given that many of us lack the capital to enter into larger investments, we may be tempted to borrow money to make up the shortfall.