In the recent past, we have seen banks being eroded away by the power of unsecured personal loans taken out in smaller denominations by ordinary citizens. Why has this happened? Well, it has happened over the last few years, and this trend looks set to continue. The key to understanding why to choose a private loan is that when you go for one, it gives you more leeway when it comes to the criteria you need to meet the criteria for the financial product.
It tends to be easier to get, and the rates tend to be more competitive
Why choose a private loan and not a bank loan? Well, there are two reasons, and they have their advantages. When you look at the benefits of a private loan, you will find that it tends to be easier to get, and the rates tend to be more competitive because the market is so small.
Secure the lowest rates possible
So, Non-Bank Private Lenders Explained – Why to Choose a Private Loan? Well, the first one is that when you get a bank loan, you must have good credit. If you don't have good credit, then you can be sure that even if you do qualify for a big finance deal, it will cost you dearly. With a private loan, you can avoid this problem and therefore secure the lowest rates possible, often up to 40% less than the rates you could get from a bank.
You don’t need to worry about your credit rating
Another advantage of private loans is that you don't need to worry about your credit rating. If you have damaged credit or no credit at all, then a bank loan is probably going to be the best way to go for you. If your credit rating is poor, then you will find that getting a bank loan is very difficult indeed, and if you do qualify for a bank loan, it is likely to cost you heavily in fees and interest. If your credit rating is good, you may end up with thousands to spare, and you should always aim to keep it that way. With a private loan, there are no such costs.
Very quick and easy way of providing the funds
Also, if you need money urgently for whatever reason, then getting a private loan is a very quick and easy way of providing the funds. This is because the money comes out of your own pocket and you don't have to wait for payment from someone else. Bank loans take a long time to come through as they have to check your credit rating and any other details that an institution holds about you. Private loans are quick, and you can have the money in your hand within days.
Can shop around for the best deals
One more advantage that you can take advantage of with a private loan is that you can shop around for the best deals. When you go for a bank loan, you will be limited to the rate that the bank has to offer. Whereas with a private loan, you can look around at a range of different lenders. And because they are secured against the money you give them, they will usually offer you a better interest rate. So when you consider the differences between a bank loan and a private loan, you will see that they are fairly similar in most ways.
It can be granted without even going to a bank, and you can find great deals
So the main question still remains, why choose a private loan and not a bank loan? If you want the money quickly and you know you won't be able to pay it back, then it makes sense to look at getting a quick loan, and this means going for a payday loan. These loans can be granted without even going to a bank, and you can find great deals this way. When looking for a payday loan, it is important to remember that the fees that you pay for them will be added onto the cost of the loan, which means that you could end up paying several hundred dollars a month for the privilege of borrowing from the payday loan company. With a bank loan, this isn't the case.
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If you have enough collateral (property), you can often get a better deal when it comes to borrowing money. This is because the bank will often want a certain amount of equity as security for the loan,, and if you haven't built up any equity by the time you need the loan, then they will be less willing to lend. But again, with a bank loan, you can get a better interest rate, longer repayment terms, and other advantages. So the main reason why you may consider a private loan are the speed, ease, convenience, and cost of the lending process.