Non-bank loans are more tolerant of the creditworthiness of their clients than bank loans, forgiving them lower or irregular income and, in some cases, records in the registers.
Some of them are close to bank consumer credit, while others are difficult to find in the banking world. A new feature of recent years is P2P loan, a loan from people.
Non-bank credit companies are also within the competence of the Fine National Bank (FNB) and are subject to the same legislation as banks in the area of consumer loans.
Requirements for applicants
Out-of-bank lending companies set the price of their loans significantly higher than banks. The reason for this is that they need to cover a higher default risk. And where does the higher level of risk come from? The fact that non-bank loans are also provided to less creditworthy clients. That’s why almost anyone can reach them. Usually, the applicant has to fulfill only the following conditions:
- At least 18 years of age , sometimes the upper age limit is determined
- Permanent residence in the Fine Republic – the condition also applies to foreigners. And they have to live with us for more than a year
- At least some income – usually just a statement of account
- Net registers – but only applies to some non-banking firms. Many companies tolerate registers or do not check them at all.
Loans from the non-banking market are particularly popular for the following benefits:
- Availability for most applicants
- Less “paperwork” and administration
- Possibility to postpone installments
- Quick settlement and provision of money
- Wide range of products
- Possibility of borrowing from people
- First free loan available
The advantages of these loans are of course offset by a number of disadvantages. The main ones include:
- Higher loan price
- Higher risk of the client’s inability to repay the loan
- Requirements for quick repayment and several thousand amounts (especially for so-called quick loans)
- High fees for extending maturity
- Risk that the applicant will encounter a provider that is not approved by the FNB
Types of loans non-bank loans
Non-bank loans are very varied. They offer a wide range of minimum and maximum amounts, installment schedule settings, and customization. In most cases these are smaller quick loans (often the first free loan) with different conditions for granting them.
Non-banking companies will also offer a medium-sized loan or even a loan of several million – with real estate collateral and possibly a guarantor. These loans are most often referred to by the following names:
- Payday loan
- SMS loan
- Loan without register
- Loan without proof of income
- Hand loan
- Loan immediately on account
- Quick Loan
- American mortgage
What about non-bank loans where they really lend to everyone?
Non-bank loans suggest that they are available to all applicants and are often presented in this way. But even in the non-banking sector, every loan applicant must be adequately screened. Often demanded non-bank loans, where they really lend to everyone so they are just a phrase, not a real product. People without employment, execution, insolvency or without income have practically no chance of getting a legal loan.
Examples of loans
Non-banking companies can offer both fast money and a higher loan, such as a car. Let’s take a look at some of them.
• Home Good Loan
Home Good loan offers 10,000 to 250,000 crowns, while the maturity period can be set to 36 – 96 months. Additional services can be added to the loan. And its big advantage is zero fees for handling, management and early repayment of the loan. Of course, the loan can be arranged via the Internet.
• Provident start
Provident offers a loan from USD 3,000 to 9,000. The repayment period is fixed, namely three months. The big advantage of this loan is zero fees and prices, so the client returns only as much as borrowed. The loan can be conveniently arranged online.
• Merratu Credit
it is a flexible loan operating on a similar principle to an overdraft or revolving loan. The upper limit is USD 50,000, the amount of installments and their amount are purely at the discretion of the client. The advantage is the need to pay only the daily interest and the fee for drawing the amount. There is no charge for changing installments. It can be pumped repeatedly.
The loan is offered by ExtraLend and starts at USD 100. The maximum amount of this loan is USD 35,000. The minimum repayment period is 61 days, up to 76 months. There is a fee for using the loan. Of course, you can also apply for this loan online via the Internet.