Non-bank lenders are financial institutions that provide credit card services as well as giving loans without taking deposits from their clients, which is the reason why they are called non-bank lenders. Their popularity has been rising steadily, with a large percentage of the market embracing them, especially in the growing economies. They are deemed convenient because of the lesser requirements they make on a client compared to bank lenders when giving loans. As they become more popular by the day, their clients run a risk of being exploited by imposters, fraudulent people and unregistered corporations who come in the name of non-bank lending.
Clients should be vigilant and on the lookout for the following factors before engaging in the process of getting a loan from non-bank lenders
The lender must have been approved by the relevant regulatory body in charge of overseeing operations of such institutions in a given economy. A credible lender will have a certificate of compliance in most cases. A client may confirm a lender’s credibility through carrying out research, consulting the respective regulatory body and engaging their previous clients other and stakeholders in the market.
A client should be sure of the lenders capacity to deliver such lending services. Competence is measured in terms of the years they have been in active operation in the market, the consistency of the quality of services they offer crowned by the reputation they have built and maintained over time. A pool of skilled personnel also enhances the lender’s competence.
Takes into consideration how the loan will be paid back. It involves the rates of interest and the time given to the client to complete the repayment. The loan repayment schedule ought to be flexible with a consideration of the uncertainties in the market. The lender should also offer low-interest rates, a rate that is lower than the rate at which their client is making a profit from the investment made out of the loan.
Documents form a critical part of the application process. It is important that there is the element of clarity in documentation, so that the two parties, more so the client understand fully the terms involved and the conditions under which they are receiving the loan. It is safe to have a legal practitioner involved for certainty purposes.
A lender should be able to deliver services to their clients in a manner that is simple and that ensures the client’s comfort. The premises should be located in an accessible place, with an option of using online services. A preferred lender is one who is quick in carrying out their processes, so that the period between loan application and approval, and between approval and receiving the loan is the shortest possible. Procedures should be limited and efficiency enhanced in all areas, with a preference for digital as opposed to manual methods.