Non-bank loans are relatively often compared to loans and constitute a separate category of financial products. They differ in the entity granting the credit or loan. Loans are granted by banks, while non-bank loans by financial institutions, other than banks or private individuals. Non-bank loans are granted by companies that specialize in providing this type of services – there are more and more of them on the market, customers can easily choose.
When choosing a non-bank loan, we should be guided by similar criteria as when choosing a bank loan. Attention should be paid to the commitment costs. We must pay attention not only to interest costs, but also to other costs. Loan companies add additional fees – related to, for example, extending the repayment period. It is also worth paying attention to the quality of service – we should choose companies that guarantee high quality of service.
It happens that non-bank loans are criticized. Many people accuse loan companies of earning a lot on clients who fail to comply with contracts on time. Let’s see how banks behave in this situation. If the customer is unable to pay the loan installment, because because of a sudden, unforeseen situation, they become too high, the bank is not favorably disposed to write off the debt. Sooner or later the debtor will have to repay the liability. Reasonable customers, in case of problems with debt repayment, quickly inform the bank about the difficult situation and a compromise is being agreed. Most often it consists in extending the loan period together with a reduction in installments. The customer is happy because the monthly fees are lower than before. However, we note that the bank also benefits – customer support is associated with obtaining higher interest, so the bank is getting richer.
At the outset, loan companies inform you that extending the repayment period of a non-bank loan is associated with additional costs. Is it really unfair to take the matter? No, especially since in the case of banks the Customer does not know what additional cost will be incurred, as the interest rate on loans is variable.