If you need to borrow money, there are many licensed money lender Singapore to choose from. The choices can be so many that it can be overwhelming to decide on a lender.
Getting a word of mouth recommendation from a friend, colleague, or family member can simplify this decision-making process. You trust this person, so you take his word as reliable, and you go for the lender they recommend.
Despite how much easier it is, word of mouth has drawbacks as well as benefits. Let’s start looking at the advantages.
Backed by real experience from actual people
Word-of-mouth recommendations are always based on actual experience. You can trust word of mouth a lot better than marketing gigs and slogans from the lenders themselves.
If a lender gives you reasons why you should choose them, you would automatically think it’s only meant to attract more customers. The lender’s claims may not necessarily be true. But if you get a similar recommendation from someone who has borrowed from that lender, it’s more likely that they are telling the truth.
Recommendations could be from people you trust
More often than not, word of mouth recommendations come from friends and family. In other words, it’s the people you trust the most. What they are saying about a certain lender is again based on their experiences. You can better vouch for their honesty in recommending a lender to you.
You can find trustworthy lenders faster
Compared to doing the research yourself, word of mouth gives you an immediate answer to the question, “Which lender should I go to?” Researching it yourself takes time and effort, which you may not have when you need an immediate source of additional funds.
Now, let’s look at the other side of the coin. Here are the disadvantages of word of mouth in choosing a lender.
Possibly biased opinions
Some people may favour a certain lender over others. Their recommendations may be biased, which gives you a false impression of that lender. In the end, the lender recommended to you may not even be a good fit for your financial situation.
You can miss out on better deals
If you go with word of mouth right away, you might miss out on better loans from other lenders. You won’t know about them unless you do the research yourself.
You could still get a good lender and a loan with reasonable terms from a word of mouth recommendation. Just take note that it may not be the best deal out there.
No in-depth research
Without doing your own research, you could miss important details like if the lender’s licence with the Ministry of Law (MinLaw) is up to date. Also, you would not be able to see comparisons with other lenders. Other details like interest rates, repayment periods, and flexibility are best known through your own due diligence.
Conclusion
Word of mouth can be a powerful marketing tool, but it also has its disadvantages. Choosing lenders based on word of mouth is quick and easy, especially if the recommendations come from people you trust. But beware of bias and missing important details about the lender.
It pays to do your own research after getting a word of mouth recommendation for a certain lender. Find out if they are really trustworthy and if they offer loans with favourable terms.
