Non-bank loans for individuals and enterprises have been gaining popularity for several years. Unlike banks, loan companies do not pay much attention to credit history. Among consumers, online loans and secured loans are in the lead. It is also worth paying attention to cash loans with home delivery.
The loan industry is booming
The non-banking sector has been steadily growing since 2008. Since the financial crisis, banks have started to advise the creditworthiness of a potential borrower more restrictively. Therefore, a gap was created in the financial market that loan companies filled.
According to a report, consumer credit for individuals mounted to USD 78 billion. The sum of loans granted by non-bank institutions is USD 2 billion. To sum up – 2.5 percent such as part of all loans granted are loans granted by the non-banking sector. The value of the entire non-bank loan market is USD 6m.
Consumer credit in a bank or a loan company?
A consumer loan in the bank can be taken by persons with permanent employment. Most often only the employment contract is honored. In addition, you should have a positive credit history. You should also go through a time-consuming verification procedure.
On the other hand, non-bank institutions do not require many formalities. Non-bank loans may be applied for by persons who work under a mandate contract or a specific task contract. What’s more, clients without formal employment can apply for payday loans. Important – for loan companies, the most important criterion is the ability to repay the commitment.
Online loans – payday loan or installment loan
The biggest advantage of online loans is the fact that the entire process from submitting an application to receiving money is done online. Non-bank institutions quickly verify the financial standing of a potential customer. Therefore, the money on the borrower’s account can be found within 15 minutes of completing the form.
Online loans (and traditional cash loans) can be divided into payday loans and installment loans. They differ in the form of repayment. Payday loans are regulated by a one-off payment. In addition, they have a lower amount than installment loans, most often they do not exceed 10,000. USD. The payment time is usually 30, 45 or 60 days.
However, the amounts offered in installment loans are higher than for payday loans. In the case of natural persons, the loan may amount to USD 25,000. dollars. The commitment is paid in installments. The deadline to settle the debt is relatively long and can be 36 months.
Home loans are still popular
Home delivery loans appeared in the late 1990s. They are the oldest form of non-bank loan. Applying for a cash loan is done by phone, at a branch or at a company representative. Most often, a potential customer receives a decision after 24 hours. The loan is paid at the borrower’s house in the form of cash. The repayment of the liability may be one-off or in installments. The repayment cycle is weekly or monthly.
Interestingly, this type of loan is still popular, especially among people living in smaller towns or in rural areas. Many customers do not have a bank account or do not use online banking. In addition, people whose bank account is monitored by a bailiff and the elderly willingly use this type of loan.
Loans for companies also in the non-banking sector
The non-banking sector also grants loans to enterprises. The amount of non-bank loans for companies is lower than at banks. However, the loans granted are relatively high anyway. They can reach up to several hundred thousand dollars.
Non-bank institutions look more gently at business activities that do not have the best credit history. Also the profits achieved by the not play company such as a large role as during verification in the bank. Lite lender is one of the institutions that provides external financing to entrepreneurs.
Loans against people without creditworthiness
An interesting form of external financing is a loan for the ownership of the vehicle. Self-employed, entrepreneurs and natural persons can use secured loans. The customer must have a passenger car or van (up to 3.5 tonnes). The age of the vehicle at the time of the loan may not exceed 12 years. Important – only the borrower can be the owner of the car.
A car valuation at Lite lender is carried out by a appraiser. The loan company cooperates with the best specialists in this matter. Therefore, the borrower should be aware that the estimated price of the car will be fair and marketable. Interestingly, the Lite lender customer can use the car for the entire loan period.
Car loan without BIK
The non-bank sector offers car loans. In the case of Lite lender, both businesses and individuals can get a car loan. The borrower must be between 21 and 70 years of age.
The financial institution offers loans from 6,000 USD up to 100 thousand USD. New and used cars can be covered by external financing. It is worth noting that Lite lender does not check potential customers in BIK databases. What’s more, people with negative credit history and those in debt can apply for a loan.
Loan with a renewable limit
A revolving loan combines the features of a credit card and online loans. The customer has the right to repeatedly use the money awarded. Each payment of debt increases the available funds. The limit depends on your financial situation and repayment options. Usually loans are granted from USD 500 to several thousand.
In order to benefit from the renewable limit, the customer must set up an account on the lender’s website. After logging in, he chooses the amount of interest. Money is transferred directly to the borrower’s bank account. This type of loan allows you to maintain continuous financial liquidity. Usually the duration of the contract is several months.
Loans for the indebted and the unemployed – with or without a guarantee?
Some non-bank institutions offer loans to indebted and unemployed persons. In the case of indebted payday loans are granted with or without a guarantor (for a larger amount). It is worth knowing that the loan company checks the BIK of the guarantor and not the main borrower.
People with bankruptcy proceedings can also use the services of such lenders. However, it should be possible to settle the obligation. The consequence of non-repayment of the loan may be a bailiff auction.
The unemployed can apply for payday loans if they can prove to the loan company that they can pay back their debts. To do this, provide a bank statement or pay for utility bills (electricity, gas).
Loans without bases – only in loans against collateral
While searching for payday loans, headlines can be found on the Internet – loans without BIK. This means that the lender will not verify the customer’s creditworthiness in this database.
According to the rule – if a non-bank institution fails to check the borrower in one database, it will do so in another. Therefore, customers should know that loans without bases basically do not exist. Of course, loan companies assess their credit history much milder than banks.
Car loans are an exception. In this case, the lender must have a car security. Such a loan can also be taken for the purchase of a car, which may be more advantageous than a car loan. Banks have higher requirements for customers, therefore appearing in the register of debtors we have no chance to receive a bank loan.