Pros and cons of non-bank loans

It is not necessary to go to the bank for a loan. There are other options. And it’s non-bank loans. They have become an interesting addition to the current credit market. As for their popularity, it is quite large. And especially for their pros. However, it should be added that they also have drawbacks. We will look at both of them together. But let’s start with what is positive about them.

Offer unique products

The first plus to non-bank loans is that they can offer quite unique products. We can say that these are also those that you will not find in other segments. So you will not find them at the bank. When we look at the three of them, it is clear that these will definitely be:

  • Micro-loans
  • Loans in execution
  • Loans for troubled clients

These are interesting segments. The first is based on the possibility to raise money for unexpected expenses. The second can help those who are in financial trouble and want to solve them. The third then targets those clients who do not have an ideal past.

The loan can also be realized from home

Not every non-banking company is large enough to have a branch in larger and smaller cities. In many cases, this is literally unnecessary. This is because a number of non-banking companies are no longer required to deal with the branch. Their plus is that they can be easily used from the comfort of home. And based on different ways. The simplest is when everything is actually done completely online. The contract is thus signed and the client just waits for payment.

But there are other options where non-bank loans show how everything can be settled from home. If a classic signature is needed, they can send their sales representative to their place of residence, who will handle everything with the client. The second option is to send the contract by courier, which will ensure handover, as well as subsequent collection and delivery back to the headquarters.

Simple acquisition conditions

This is one of the main advantages that non-bank loans have. What to imagine under it? How come approval itself is not as demanding as bank loans. A lower income may be enough, just as it may not matter to the crust of the past. This opens up opportunities for a number of other groups, which often do not reach the bank for money. It is about:

  • Students
  • Mothers on maternity leave
  • Disabled and old-age pensioners

Processing is fast

Most clients really want a loan very quickly. If you are the same, it is necessary to say that the non-banking segment is the right one. Thanks to the relatively benevolent acquisition conditions, it is possible to get money quite quickly. For example, micro-loans are not a problem in several tens of minutes. If we look at classic consumer loans, it is possible to count on them that everything can be settled up to the next day from the application.

That ends our list of benefits. Now we will focus on the dark side of current non-bank loans. Here are their disadvantages.

Interest rates

Interest rates

There are, of course, exceptions where we can objectively say that there are non-banking companies that may be beneficial under certain conditions. As far as the right combination and creditworthy client is concerned, interest rates can differ only slightly from those of banks. But the real practice is that non-bank loans are less profitable. Interest rates can be even tens of percent. Not only annually. With micro-loans mentioned above, it is no exception that you pay a few tens of percent more for monthly lending. You will also give several hundred crowns from a thousand crowns.

Possible fraud

Possible fraud

There is nothing unusual in the non-banking segment that various fraudulent practices may occur. The state is trying to prevent this by granting licenses. These are non-bank loans where fraud has been a daily routine. These may be various negatives arising from the treaty, they may be different dubious approaches, as well as minimal transparency. All of this has a negative impact on the fact that it is possible that the non-bank loan will be completely different than you expect. That’s good to watch out for.

But there are also more serious types of fraud. Such, when the client recovers money in advance, and then the company does not even respond. Likewise, different color lines need not be an exception. Those that have a situation where tens of crowns are charged per minute.

Free Loan Classifieds are the hatcheries of fraudsters. What to watch out for?



They are nothing special. Non-bank loans are relatively well known. Indeed, a variety of fees can be charged today. Their main reason is that they do not count towards the interest rate. At first glance, they may seem advantageous, but it is not very interesting in terms of the APR rate. Exactly opposite. Therefore, it is good to be very careful about fees for non-bank loans. What are these often?

  • Fee for processing
  • Management fee
  • Provision fee

What is the APRC and why is it worth paying attention to it?

Money delivery can take a long time

Money delivery can take a long time

If it is not a cash loan with the option of picking up at the branch, it is necessary to say that the loan is sent to the bank account of each applicant. And this is associated with the fact that the delivery of money can take longer. Blame here may be the specific bank account from which the money is leaving. The classic bank transfer should be completed within 24 hours. But it must be said that it is only on working days. If there is a weekend ahead of you, and the money is shipped on Friday during the day, it may not arrive until Monday. When they are shipped late in the evening, there is nothing unusual that they arrive on Tuesday. This is due to the fact that a non-banking company cannot set up an account for clients to send money to in seconds.

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