There are hundreds of finance companies and banks out there and with the constant additions of more, it can be difficult to tell if you are getting the best service for what you are after if you are swamped with the possibilities.
Pros and Cons of Getting Personal Loans from a Loan Lender
Personal lenders have many benefits, the main benefits to using a personal loan company depend on how much you are looking to borrow, how quickly you are looking to acquire the funds and what you look like financially. A personal loan or payday loan company will be able to do a much quicker assessment of an application than a bank which will allow you to receive the funds much faster.
Payday lenders are also somewhat more lenient in terms of your lending criteria. Where a bank may be unable to lend if you are solely on centrelink or only working casually, a personal loan company may be able to help.
A payday lender will also generally be faster than applying for a loan through your bank. As the bank is required to collect more information than a persona lender, they take longer to assess it. A personal loan company will still ask for some of the information that a bank requires and while it can sometimes seem like a lot, we are required to collect it by legislation.
Despite the rigorous assessment that is done when you apply for a loan some lenders can have an answer to you in under 2 hours. Some personal lenders are also able to have the funds dispersed into your account on the same day.
Pros and Cons of Getting Loans from Banks
While a bank may take longer, there are other benefits to going through a bank for a loan. You do not necessarily have use the bank that you hold accounts with to receive the benefits. A bank will be able to offer you a lower interest rate than a personal lender. Personal lenders are governed on how much they can change so the interest rate will almost always be higher with a payday lender than with a bank.
Banks are also generally able to offer a higher amount without the use of security. Typically, a personal lender will require a vehicle to use as security for any amount over $2000-$2500, but a bank may be able to offer more without the use of a vehicle.
A bank may also be able to offer more flexibility in terms of their repayments and loan durations. While this is not guaranteed, there is a degree of extras flexibility with banks as they typically deal with higher amount loans they do not have to be paid off within a short period of time, like many payday loans.
A bank may also be able to offer a re-draw facility or the ability to take out of your loan if you have paid a certain amount. Many small loan companies are required to get certain documentation every time you need extra finance.
So, WHAT'S THE VERDICT? Is It Better to go Through a Lender or A Bank?
As you can see, there are pros and cons to both types of finance, and it all comes down to the personal preference and availabilities of the borrower. If you are looking for a fast loan that you would like to pay back quickly, then a personal lender might be right for you. If you would rather take some extra time to be assessed and would prefer a lower interest rate than your bank might be the best way to go.
It all depends on what makes you the most comfortable.
If you'd like to enquire about our personal loans, or wish to ask about how our loan application process works in general, pleasecontact Champion Loans.
