Are you thinking about arranging a new loan, but are you not yet deciding whether you would be better off bank or non-bank loan?
In this article we will advise you in which cases it is better to contact a non-banking company and, conversely, what are the advantages of bank loans.
The offer of loans on the Czech market is extremely varied. In the banking sector, almost all institutions offer consumer loans, the largest of which include Honest Bank, Good Lender, GFIC or Good Finance Bank. However, loans from smaller banks are increasingly popular.
Among non-banking companies, the choice is even more varied and at present hundreds of different providers operate. But not everyone is serious and so it is necessary to choose from the best brands – the most popular include Honest loan , then loans from Good Credit, Financial Savers loan. If you are interested in a small and short-term loan then the market leaders.
Bank loans have lower interest rates
The advantages of bank loans are quite clear – much lower interest rates and lower APRC, generally more favorable conditions than non-bank loans, 100% certainty of fair dealing, the possibility of borrowing a very high amount or less sanctions in the event of repayment difficulties.
Generally speaking, anyone who can get a loan from a bank should definitely apply for a loan to any bank and it will always be cheaper than in the case of non-bank loans.
The problem, however, is that not everyone has the opportunity to obtain bank loans – banks do not lend, for example, people with a record in the debtors register, people unemployed or with too low income, people in distraint or insolvency proceedings, etc.
The first free loans are paid from non-banks
Non-bank loans generally tend to be worse than bank loans, but there is one exception where it is worth borrowing from one of the non-bank providers. This exception is the first free loans, where the client pays no extra crown, the loan is completely free of interest and no fees.
But the first free loan is only for those who need only a small amount for a short time – usually only a few thousand for 30 days, with the exception of Loan24 with a maturity of 75 days.
There are not many companies offering the first free loan. Otherwise, non-bank loans do not pay much and are suitable for those who do not have a chance to get a loan from the bank.
Even non-banking companies offer different types of loans
However, non-banking companies are not only classic loans, some of them offer other loan products. These include, for example, loan consolidation , mortgages, car loans, credit cards, or hire purchase.
In recent years, non-bank loan consolidation has been a highly sought after product – allowing people who have multiple loans to merge them into one big loan. Loan consolidation pays off mainly to those who have a lot of loans and need to reduce their total monthly installment.
A variety of independent financial websites that specialize in comparing loans can help you decide which loan to take. Among the most reliable are especially Good Finance, Good Lender or Honest Loan.
Lots of interesting articles, information and advice from the world of credit can be found in the financial magazine.