Types of non-bank loans you need to know
Today, a person who receives a negative decision on granting a bank loan is not left alone. She still has several other options to choose from to finance her, though on slightly different terms than a standard bank loan. In this article, we’ll look at four types of non-bank loans and outline what they are. This knowledge will prove useful when you want to use one of the services.
Let’s start with the type that best suits ordinary loans offered by financial institutions. Of course, we are talking about installment loans, in which we are obliged to pay the installment premium each month. The total amount that we have to pay back is correspondingly higher than the amount we received due to accrued interest. The main difference between an ordinary bank loan and non-bank installment loans is of course the interest rate. In the latter case, the conditions will be definitely less attractive, but the compensation is the ease of obtaining a loan. More and more companies provide such financing even to people who are not employed under an employment contract. Installment loan procedures are kept to a minimum, so we can often receive money in fifteen minutes.
Fast and convenient – payday loans
Another type of non-bank loans that you probably heard many times in TV commercials are so-called payday loans. They differ from installment loans in that there is actually only one installment here. It includes the loan amount plus commission and any additional fees. As the name suggests, payday loans are a short-term loan. They work, for example, when we need several hundred dollars for one month. This may be due to holiday expenses. In this situation, we will quickly receive the necessary money, and after receiving the remuneration for work we will be able to give it back.
The third type of loan is considered the easiest to obtain. The requirements that must be met to get money are absolutely minimal. These are secured loans, which can be a flat, car, plot or even gold. So as we can see, in the absence of repayment on our part, the lender can take over our property. It is a guarantee for him that even if he is not repaid he will be able to get his money back. Therefore, he does not need to verify the borrower in BIK or check his employment contract. A person who wants to take out real estate loans should make sure that they can pay them back. Otherwise he may lose his valuable property.
Social loans provided via the internet
Finally, we distinguish one more type of loans, for which we do not go to the bank, but to … the Internet. We are talking about so-called social loans, which can be given by anyone with financial resources. Special portals allow you to invest in loans granted to users. Then the loan usually consists of a few or a dozen investors, and the average interest rate per year in this case is about ten percent. However, you need to be patient and ensure the greatest possible credibility for investors to be interested in granting a loan. Nobody will risk putting money in for a stranger whose financial capacity seems doubtful.