What Does No Bank Lender Mean?

Lending carries an important aspect of the overall economy. It gives the necessary boost to the economy so that it can grow even more and bring development in social status. Thus, bringing the lifestyle of a people to a much higher status. Without lending, the economy would have been stagnant, and it wouldn’t have been able to grow.

There are many agencies, which do give credit or lend credit to the people. Banks have played an important part in lending. Where, in various field, banks do lend so that, both the parties i.e. the lender and the borrower can get benefit from that. The borrowers invest the capital into business or buying properties or other aspects in order to enrich their company or lifestyle. Whereas, the lender earns interest from the capital that they have provided as the loans. No bank lenders: However, the banks aren’t the only financial institutions, which provide lending. These financial lenders don’t fall in the strict norms as banks, though they also have played a crucial role in the economy. There are various no bank lenders and since they are of a diverse type, it is difficult to give an appropriate definition to them. The no bank lenders may consist of credit unions, building societies, mortgage lenders, etc. Thus, the no-bank lenders can be of different fields, but they do serve a similar purpose. They give credit, which people can borrow after getting qualified for the loans.

There are various differences between a bank credit and a no bank lender

For example,

1. The criteria to qualify in no-bank lending is somewhat less strict than that of the banking. If you are applying for a loan, then you have more chance to receive it in a no-bank lending than a bank. This is because many no-bank lenders invest in the high-risk category in order to gain more return. Here, many people can apply for the loans who may not get qualified to apply for a loan in traditional banking. Hence, the no bank lending gives them the opportunity to get a loan even when the bank does refuse them to give one.

2. In banks, there are fees in order to set up a loan. One has to go through an extensive procedure in order to receive the loan and you have to pay different types of processing fees in the whole procedure. In case of no bank lenders, these fees tend to be minimal and the ongoing fees, which they may charge, will be on the minimal side too, so that the borrower doesn’t have to pay those fees on a higher side.

3. No bank lenders are also famous for providing loans, which are customized in nature. It means, the loan, repayment will be strategized after discussing with you so that you won’t face any problems later on while repaying the loan. This flexibility gives the no bank lenders an edge over traditional bank sector with limited types of loans and generally doesn’t offer a customized solution addressing all your requirements.

4. No bank lenders also offer shorter repayment, which means you can pay the debt earliest so that you will be free from the loan. Though, no bank lending comes with a higher interest, it does provide much flexibility in terms of repaying the debt. You can opt for a shorter repayment period, which will enable you to give less interest and become debt free in a short span of time.

5. The application process is faster in case of no bank lenders than that of the traditional banks. Hence, in emergency cases, where one needs the capital within a short span of time, it is better to go to a no bank lender than the traditional bank because, in case of no bank lenders, the process will be much faster. In a nutshell, no bank lender is a great way to get instant and quick loan in a short span of time without much hassles.