Uncategorized

Bank or non-bank credit – choose wisely!

You will be dealing with both bank and non-bank lenders when looking for the best loan for your situation. How do you know which one to choose? We, the Vernast family, have put together some basic information to help you understand what a non-bank loan really is and how it differs from bank lenders. Read on and be confident in your choice!

What is the difference between a bank and non-bank lenders?

What is the difference between a bank and non-bank lenders?

Although the word “credit” has been associated with banking services for many years, non-bank lending is increasingly gaining ground today. There are several differences between the loans of these two lenders, so when looking at lenders and types of loans, remember that the choice must be based on your confidence in the ability of the lender to meet the terms. What are the primary differences between a bank and non-bank lenders?

Types of credit

Types of credit

The main differences between non-bank and bank loans are the amount, maturity and reason for borrowing. Financial services provided by bank lenders are most often based on large-scale long-term loans such as mortgages, student loans and student loans. Non-bank credit, on the other hand, is smaller and has a maturity of seven days to a few years:

  • fast internet credit and SMS credit;
  • consumer credit;
  • credit line.

Therefore, there are also different reasons for borrowing – bank loans already have a specific spending goal, such as buying a property or paying for tuition. A non-bank loan is a good choice if you want to get additional financial resources for a variety of well-considered expenses (for a doctor’s visit or for paying big bills) and higher daily expenses (for home appliances or home repairs).

Application and examination process

Application and examination process

Given that loans from banks are significantly larger and longer-term, it takes longer to process an application and often requires additional security from the customer, such as a pledge or guarantor.

The application process with non-bank lenders has several benefits:

  • login via internet or text message. This means that there is no need to visit the lender in person – all documents can be submitted at a convenient time and place;
  • the application will only be processed within a few minutes if you apply during the lender’s working hours;
  • money will be credited to your account as soon as the application is approved, provided that your bank and the lender’s bank account are serviced by the same bank.

Applying for a non-bank loan is relatively faster than with a bank lender, but the choice of lender may be the biggest difficulty. Do you know how to find a reliable lender? We, the Vernast family, believe that making the right choice is an important aspect of borrowing, so we’ve prepared some tips to help you make sure of the quality of each lender!

Make sure your non-bank lender’s credibility!

Make sure your non-bank lender

Non-bank lending is a popular service in the loan industry – when you are looking for a lender, you will come across a wide selection of lenders and types of loans. The most important task before submitting an application is to make sure that the lender is trustworthy and takes care of the clients financial security.

The first thing you can check is whether the lender is a member of the Laten Finance Group. Read on to find out what this organization is and how it affects those who have non-bank credit on offer!

Latvian Association of Alternative Financial Services

Latvian Association of Alternative Financial Services

The Laten Finance Group, or LAFGA, brings together non-bank lenders to develop positive, safe and sound lending practices in Latvia. What does this mean for you?

LAFGA members, including us, have agreed and signed two documents that determine both the quality of service and the attitude towards our customers:

  1. standard of good practice – its aim is to provide reliable and socially responsible lending practices focused on long-term cooperation;
  2. A customer charter is a commitment by lenders to help clients honestly with their financial situation, especially if they have trouble paying off their loan. This charter states that the lender’s relationship with the client must be ethical.

Get more information on how to evaluate a lender

Get more information on how to evaluate a lender

The Neap platform is a place where you can get all the information you need about various non-bank loans, as well as how to evaluate a lender and make a responsible decision. Here you can read about industry news and get expert answers if you have any questions about non-bank credit.

The purpose of Neap is to provide an individual approach to all clients, so that everyone interested in non-bank credit can get all the necessary information and be able to choose the most suitable loan for their situation.

Remember that both a bank loan and a non-bank loan are serious decisions. Before applying, read carefully all terms of the contract and make sure you are able to meet them. If you have any questions, ask your lender’s client advisors to help you make the best decision.

We, the Vernast family, recall – borrow responsibly by seriously considering your ability to repay your credit!