Seven myths about non – bank loans

For bigger or smaller purposes, there are times when you need help from bank or non-bank lenders to achieve them. You should spend a lot of time comparing offers, finding the best interest rates and the most appropriate repayment terms. It is up to each lender to trust. One chooses only its own banking services, while the other selects an already tested non-bank lender.

Latvia has quite a large number of non-bank lenders, so in order to choose the one that best suits your needs, you have to take the time to evaluate offers and benefits, which are particularly burdened by the prevailing stereotypes in society. What are some of the most common myths about non-bank loans, and if they are true, let’s go on.

Applying for a loan takes a lot of time

Applying for a loan takes a lot of time

Thanks to modern technology you can get a suitable credit offer within 2 minutes, but it takes only 5 minutes to complete the credit.

Applying for a loan online nowadays is made as easy, simple and profitable as possible. All you have to do is start by specifying the loan and monthly payment amounts, then fill out a customer questionnaire with some key private details, then confirm your registration and a customer service representative will contact you in a few minutes.

Arranging a loan with a non-bank lender loses debt

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This is one of the most common myths. However, it can simply be refuted. This is most often the case if a person has not seriously considered the extent of his credit obligation and his ability to repay it. The most common types of loans offered by non-bank lenders are those that are issued for a fixed period of time, for example, when they are repaid the following month when the salary is received. In addition, most non-bank lenders offer new customers the opportunity to apply for a first loan free of charge, which means that they do not have to pay interest when they are repaid.

The refund process is complex and non-transparent

The refund process is complex and non-transparent

Don’t be! For example, if a consumer loan is designed by George Knightley, you can at any time sign in to your customer profile, which shows the repayment schedule, the monthly payment amount, the outstanding loan amount, and the monthly repayment date. So you don’t have to make your own notes and think about reminders, because you will find all the information you need in your customer profile.

Interest rates are much higher than at the bank

Interest rates are much higher than at the bank

This too is a myth. Not always the bank you have been a customer for years will be able to offer you the best interest rate and repayment term. Non-bank lenders have made their loan issuance process as convenient and profitable as possible. Of course, before applying for a loan, it is definitely advisable to compare the interest rates and make sure you are getting a good loan. However, time is money and non-bank lenders have made applying for and applying for a loan so fast that you can get the credit in your bank account on the same day and even faster, but it will take a relatively longer time at the bank.

Returning the loan ahead of schedule is unprofitable

Returning the loan ahead of schedule is unprofitable

It is believed that early repayment is impossible or even disadvantageous. However, it is not. Many non-bank lenders are accommodating in such cases and do not charge any penalty or future interest, which is calculated until the date the loan is repaid in full. Of course, in this case, it is advisable to first contact the credit institution’s representatives and find out how to proceed. You can also easily change the repayment schedule to a more convenient one.

A consumer loan can only be drawn up with a good credit history

Of course, each situation is evaluated individually, so it is always worthwhile to contact a non-bank lender’s customer service and find out your options before applying for a loan online. The fact that payments have been delayed in the past does not necessarily mean that the road to obtaining credit is closed. It is possible that a consumer loan may be granted for a smaller amount as the lender may consider you an insecure customer. What matters more, however, is the amount and regularity of the income the client is currently owed.

It should be remembered that the law defines a certain amount of interest, which may not be exceeded by loan payments, so if the customer already has obligations to another credit institution, the lender may decide not to grant the credit.

You cannot apply for a loan with a low income

You cannot apply for a loan with a low income

Not only the amount of income, but how regular it is, matters when you apply for a loan. The amount of income has a greater impact on the amount of credit available, as the lender also assesses your ability to repay it.

Likewise, a lender can offer you a longer repayment period so that the monthly payment is appropriate to your income. Of course, each situation is assessed and considered individually, but the monthly loan payment should not exceed 50% of your monthly income.