Cheaper and safer loans
Banks offer relatively lower interest rates compared to the non-banking sector. Banks are able to offer products tailor-made according to the client’s requirements. This loan is one of the least risky.
Banks currently offer their clients a wide range of services. Nowadays, “life on debt” is a very popular lifestyle and banks are adapting their offer accordingly. The diverse range of lending and borrowing options covers virtually all demand. Thanks to public surveys and self-monitoring, they respond appropriately to the acute needs of individual companies or people. Low interest on bank loans is redeemed by complex administration, the necessary integrity and a clean record in the debtors register. Only then is it possible to obtain a loan from the bank without any problems and to take advantage of all the advantages offered by bank loans. Recently, there are also loans without confirmation of income, in cases where the applicant is a bank client and he / she sees his / her income and payout as he / she regularly goes to the account.
Rates of loans
As already discussed, interest rates are relatively lower than for comparable products in the non-banking sector. However, it is important to note that the interest rate is not everything. Banks charge a variety of fees for account maintenance, account statements, settlement fees, repayments, fees for various orders, and the like. Therefore, it is always necessary to monitor bank loans not only the interest rate, but the full APR, which tells us the amount of the amount we actually pay for the loan.
Properties of bank loans
Bank loans are very specific in many respects. Proper repayment is required. Banks do not like clients who are late in their payments. They often treat them as very risky and problematic clients. The recovery of funds costs the bank extra funds that it does not want to spend. Therefore, banks considerably more screen their clients before they even provide any loan. It is necessary to prove income, expenses, prove sufficient creditworthiness, to prove the permanence of employment and its prospects, often it is required to prove the purpose of the loan and its use. All this must take place before the loan is concluded, so that the bank is satisfied and the loan can be closed.
Advantages and disadvantages
The general benefits are lower interest rates, so the loan is cheaper. On the other hand, it is not for everyone; banks assess creditworthiness more closely and lend credit applicants more than non-bankers.
- Lower interest
- Lower APR
- Less risk
- Less throughput
- More documentation and auditing
- Longer execution