What to choose when you need a loan – a bank or non-bank credit institution? | Microinvest

You have decided that a loan is necessary. The next step is to decide where to get it from.

When choosing between a bank and a non-bank credit organization, for a start, you need to have answers to few questions:

– How urgently do I need money?

– How much do I need?

– Do I have a confirmation of a fixed income?

– In what term will I be able to return the debt?

Let’s try to make it clear.

As a rule, a bank can approve a larger amount for a longer period. But, in order to receive it, you must have a permanent job for the last three months and you will need to confirm the received income. Depending on the amount, you may need a pledge of immovable property, as well as an initial contribution (first installment). The deadline for examination of the application may be too long.

In a non-bank credit institution, you will receive a response within a half an hour and you will be able to receive money in the same day. At the same time, you will be asked only for an identification card and details about a contact person. You can apply online and take a loan even for one week without interrupting your main business. However, the cost of such a loan is usually higher.

We invite you to see below the main advantages and disadvantages of each organization, which will help you to draw up a general conclusion.

Bank credit

Advantages:

– lower interest rate

– large loan amount

– longer loan term

Disadvantages:

– longer term for making a decision on loan approval

– minimum loan term of several months

– a bigger package of documents

– official employment needed

Non-bank organization credit

Advantages:

–  faster decision making process

– available online application

– a high probability of a positive decision

– the opportunity to get a loan for a very short term – starting from a few days

– most often for registration you only need an identity card

Disadvantages:

– higher interest rate

– limited maximum amount, average up to MDL 50,000

– shorter loan terms, average up to 3 years

It turns out that if you need a sufficiently large amount that you are ready to pay for several years, a bank loan is more suitable. If you need money urgently and the amount is small, it is better to contact a non-banking organization. These organizations are more flexible, loyal to customers and focused on quickly service.

 

Be informed when choosing your financial partner.

GMW March 25 – 31, 2019

www.globalmoneyweek.org

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