Most of us have a basic understanding of what a personal loan entails. We understand that in return for a cash injection, we would have to pay back both the initial principle sum plus interest, which represents the opportunity cost and risk incurred in extending the loan to us. As such, borrowers attempt to find low interest personal loans.

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.