When looking for a loan, you must do your research to find the best lending options. After all, this is a long-term investment that requires commitment. There are two main options for borrowing money: banks and non-bank lenders, and today, more and more people are looking to the latter.
A non-bank lender is a financial institution that offers loan products, but unlike a bank, cannot provide deposit accounts. Services generally include basic and full-featured home loans, variable and fixed-rate loans, commercial property loans, SFME loans, business loans, car loans, and sometimes even credit cards.
In the past, non-bank lenders were often considered to be the last resort for anyone applying for a home. Today though, this isn’t the case, and many people visit a lender before they even consider a bank.
Here are ten reasons to use a non-bank lender:
1. Competitive Rates
Because non-bank lenders are structured differently to retail banks, they often have fewer overheads. As such, they can turn these savings into lower rates on loans. In many cases, they’ll give you a better rate than the big four banks.
If your circumstances aren’t the same as other people, it doesn’t mean you won’t get a loan. For example, if you have bad credit, or no recent tax returns, a bank probably won’t even look at you. A non-bank lender will.
3. Personal Service
The big banks generally have millions of customers around Australia. Non-bank lenders don’t – so they’re able to provide more personalised service for you. You won’t be talking to machines, and your credit score won’t be based on a machine. Instead, you’ll talk to humans who are dedicated to helping you.
4. They’re Safe
Non-bank lenders are financially secure institutions. They comply with the same credit rules and regulations as banks.
5. Lower Deposits
With big banks, you generally have to have a 20% deposit before you can buy your home. For some people, when paying close to $500,000 for a home, this seems impossible. Non-bank lenders have other options available and can work with deposits as low as 5%.
6. They Help Self-Employed
Someone who is self-employed will find it hard to get approved for loans with big banks. It’s all about the risk. Non-bank lenders, however, generally look at the last two years of financials and your credit history to make their decision.
7. Fast Approvals
When applying for a home loan, big banks don’t prioritise. And you could be waiting a while to get approval. Non-bank lenders, however, generally deal with fewer customers so you may not have to wait as long.
Non-bank lenders have a range of products available, from home loans to commercial property loans, loans for SMSFs, through to loans for self-employed or bad credit holders.
9. Lower Fees
When you get a loan, it’s often the unexpected fees that can end up costing more in the long run. Many non-bank lenders offer lower setup and ongoing fees than the big banks.
Non-bank lenders are regulated by the Australian Securities and Investment Commission (ASIC) and Consumer Credit Code.
If you want to find out more, get in touch with our experienced team today. We’d be happy to discuss your loan options, start now by pressing the apply button below.