A non-bank loan could be a good alternative if you are you considering taking out a loan?
You are likely thinking of approaching a bank with your application. This seems like the logical choice, right?
Well, what if I told you there are several benefits to a non-bank loan instead?
A non-bank lender is a financial organisation that offers several different types of loans.
The most significant difference between the two is the fact that non-bank lenders do not possess a banking licence.
This article will list 7 of the benefits of borrowing from a non-bank lender, rather than borrowing from a bank.
Non-Bank Loan – Lower Interest Rates
One of the benefits of borrowing from a non-bank lender is the fact that they will generally offer lower interest rates than the banks will.
This is due to the fact that the non-bank simply borrow money themselves at wholesale prices, allowing them to decrease the interest rates compared to the banks.
This saves you significant money and will, of course, benefit your cash flow and overall finances!
Lower Deposits for a Non-Bank Loan
As you are likely already aware, purchasing a home is an expensive ordeal.
For most, this is only possible with the assistance of a home loan, an exchange that will require you to place a deposit.
A deposit is the amount of money contributed to the purchase of a property prior to receiving a home loan.
It serves the purpose of proving to the bank that you have the finances to continually pay your loan repayments time efficiently and to attempt to avoid the risk of a large number of bankrupt or insolvent clients.
This deposit can be very pricy and difficult to gather before purchasing your property, especially with the larger deposits required by the banks.
Did you know that non-bank lenders will generally offer a lower deposit?
Banks generally charge a deposit of approximately 20% of the loan amount which, depending on the price of the property you’re purchasing, can be an extremely large amount of money to pay all at once.
However, non-bank lenders may offer you a deposit of as low as 5%, saving you from paying hundreds of thousands of dollars in one payment!
Non-Bank Loan – Customer Service
We all know that large corporations tend to be a bit cold.
Well, with a non-bank lender, you may find that issue one of the past!
The bigger banks tend to process applications via computers, meaning that your information is translated through computer code and the element of expression or emotion is not present when deciding your fate.
Smaller lenders, however, will in most circumstances have employees file applications, meaning they can interpret your request with an element of human intelligence and emotion, something that computers simply lack.
This is due to the fact that big banks are generally large corporations with too many clients applying for loans to manage on a personal level, while smaller corporations generally have the clientele and the employee rate to manage this.
Furthermore, post-application you will likely find that small loaning businesses will find the time to personally attend to your needs and the time of day to fit you in for a conversation about your business efficiently when needed.
They may also be a little less harsh than big banks provided you respect their service and talk with them if you are having issues.
This will overall improve your experience with your loan and overall benefit your finances!
Faster Non-Bank Loan Application
Have you ever applied for a bank loan?
Between the document signing and meetings needed before the processing even begins, the process can take weeks, even months!
In the case of a home loan or a loan for repairing home damages, this may mean that you must spend the time waiting for that loan living with family or friends or even staying in hotel accommodation, something that can affect your finances and be of extreme inconvenience.
If borrowing from a non-bank loaner, however, you may not find this an issue for as long!
Non-bank loaners will usually review your application almost instantly, saving you so much time and improving your cash flow by shortening the loan process.
For this reason, you may receive your loan in a matter of days!
If Your Self-Employed, You May Find It Easier
When applying for a loan, you will be required to fill out a section documenting your employment status and place of work.
If you happen to be self-employed, you may find it significantly more difficult to be accepted by banks for loans than those working for others.
Banks generally require an endless list of documents and other evidence to prove that you are indeed financially stable and will be able to meet the loan criteria.
This can be a real headache especially if you know yourself that you are financially stable enough to meet payment requirements for the loan without trouble!
Fortunately, borrowing a loan from a non-bank lender may make this issue one of the past!
Non-bank loaners are much more lenient with self-employed individuals and may accept loan applications in circumstances that banks would not have!
May be More Willing to Accept Your Application
Banks are infamous for being quite rigid with their acceptance of clients.
When applying for a loan, there are so many aspects you need to consider to even be a serious candidate for an accepted loan application.
Between your credit score, employment status, and other key financial feature, you may not be the ideal loaner in the eye of a bank.
However, loan criteria from non-bank lenders are usually a lot less harsh.
Non-Bank Loan means more Flexibility
When deciding on the details of a personal loan, there are many different aspects that you should take into account.
It is vital that the terms of the loan suit your lifestyle and your financial situation to prevent missed payments and other negative consequences.
With a non-bank lender, your options are a lot more flexible.
If you have any past financial issues that may affect your ability to take out a loan, a non-bank lender may be right for you.