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We don't all conform to the traditional lending categories, so it's good to know your options when it comes to finding the right fit for you financially. Non-bank lenders can offer an alternative solution when you're in need of a personal loan. If a bank isn't offering the product you need or if you don't meet the eligibility required by traditional banks, loans from non-banks are worth considering.
When referring to "non-banks", you can be talking about a number of different institutions. These include independent lenders, neobanks, P2P lenders, credit unions and building societies. These institutions, thanks to their smaller size compared to traditional banks, are often able to provide more personalised service, and potentially more competitive rates or less stringent lending criteria, when it comes to personal loans.
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Apply personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.
Often, the most notable difference between bank and non-bank lenders is that banks are ADIs (Authorised Deposit-Taking Institutions). This means that they can accept deposits from members, e.g. current accounts or term deposits. They are also regulated by the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC). However, this is not always the case. This is because some non-bank lenders, or non-traditional bank lenders, are also regulated by APRA and can accept deposits.
There are two types of non-bank lenders:
Personal loans from non-banks often offer the same features as banks, including flexible repayment schedules and competitive variable or fixed interest rates. Personal loans are typically given in one lump sum with the expectation that it be paid back to the lender over a pre-determined amount of time. Interest is applied in the same way that a home loan is, although generally at a higher rate.
You may find different personal loan offerings from non-bank lenders, such as secured personal loans that let you use a term deposit as a guarantee, or an asset such as a vehicle or jewellery. You may also find non-bank lenders offer less stringent lending criteria, but higher rates and fees than traditional banks. How exactly a non-bank personal loan will work will depend on the type of lending institution that you opt for and on the individual lender.
You have a few options available to you when it comes to lenders if you're looking outside of the banks:
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When you opt for an alternative lending solution, you open yourself up to a new world of features and benefits, some of which include:
There are a number of different institutions of varying types to consider when you need the security of a personal loan. You should carefully compare their features to find the one that will give you the most benefit. Keep these points in mind as you are doing your comparisons:
A non-bank lender may not have the same amount of funding or capital adequacy as a big bank. It also may not have the same technology and facilities that the big banks do, meaning a lack of branches across Australia. However, because all lending institutions are regulated by ASIC, risks of using a non-bank lender are limited.
While this is something to take into your comparison, be mindful that to be a customer of a credit union, you need to be a shareholder of that particular credit union. So whenever the credit union returns its profits to its shareholders, the returns are essentially going to you in the form of cheaper products.
Once you have made your choice, you can follow the links on this page to be redirected to the application page. Keep in mind that most will require the following information as you proceed with the application:
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