When deciding whether to take out a loan, many of us wonder whether to use the banking institution when taking it, or to decide on non-banking institutions, which are very many today and are tempting us with extremely favorable conditions.
When making such decisions, it is worth considering all pros and cons on the side of each of these two solutions.
If we were to question the public, then we would certainly find as many supporters of both non – bank loans and those granted by banks. The decision, which solution to choose depends, however, largely on our individual preferences, as well as on the amount we want to borrow and the time that we want to spend on repaying our debt. Then it will be easier for us to choose a specific solution.
Similarities between bank and non-bank loans
When looking for similarities in both types of loans, particular attention should be paid to the amount of loans granted by banks and non-bank institutions. They are basically the same. In practice, this means that when we think about the amount of ten thousand, we are no longer condemned to a bank loan. More and more non-bank institutions provide loans for very high amounts. For this reason, they are so popular. The similarities also apply to installments spread over a longer period of time. Not only banks tempt with small installments, but also in non-bank institutions we can count on a favorable distribution of debt over time and thus lower installments.
Differences between bank and non-bank loans
As for the differences related to bank and non-bank loans, there are many more than the aforementioned similarities. Thanks to these differences, it will be easier for us to decide which option we prefer. First of all, it should be emphasized that we will not get a bank loan via the Internet. Of course, banks give us the opportunity to submit an application through the website, but after its positive consideration we will have to complete all the formalities at the bank’s outlet. The situation is different in the case of non-bank loans. Here, we can arrange all formalities via the Internet, and the loan amount you are interested in will be transferred to our bank account in a short time.
There is no doubt, therefore, that borrowing a non-bank loan is much simpler and faster, because it does not involve long procedures. Also the very process of verifying a client who wants to take a loan from a bank is longer. The banks check the applicant’s credit history in detail. Non-banking institutions, in turn, offer their clients loans without reaching for the Credit Information Bureau. It is worth noting, however, that such loans are granted up to a certain amount.
Above the amount, a non-bank institution also reaches for our credit history. If you want to borrow from a bank, you also need to have an account in it, which is not the case with non-bank loans. A bank loan, in turn, often has better interest rates than those offered by non-bank institutions.