Bank credit is available to anyone with a decent income, a sound credit history, and at least a borrower who is at least of age and meets all other bank eligibility criteria. But now we are living in a time when almost everything can be done with the help of the Internet.
Loans from private lenders, such as quick loans, consumer loans, can only be obtained via the Internet
Each borrower does not have to come in person, as all operations are done electronically without even leaving home. On the other hand, banks that have provided their customers with the ability to borrow money to purchase the goods and services they need for a very long time still only grant loans if the customer visits the bank branch personally.
It is true that some banks, such as East Bank, now allow you to apply for a loan through Internet Banking, but this does not change the fact that the customer also has to come to an individual appointment with a bank employee to complete all the necessary documents.
One of the major differences between loans from private lenders and loans granted by a bank is customer due diligence
Although nowadays the testing of fast and other types of borrowers with private lenders is much stricter than five years ago, as well as the criteria for granting loans on the internet have become much more restrictive, this study of borrowers is still not as rigorous and thorough as in banks .
The answer to the question – why so? – lies in the fact that banks issue loans out of money deposited by other bank customers. If a person wants to get a loan through a bank then double borrowing can be said to work.
When a customer deposits their money in a bank, the bank becomes a borrower and borrows that money from the customer to lend to another bank customer who needs a cash loan. As a result, the bank needs to assess borrowers very carefully and check their reliability, solvency, stability and credit history.
If the bank issues a loan to a customer who has not been thoroughly tested and is subsequently unable to repay the loan, there is a loss.
For a single borrower, this is not tragic yet, but if it were to happen for the most part, for example, most borrowers are unable to repay their loans, then the bank is in fact no longer operational – at a loss and owed to the people whose money these loans are. were issued.
As a result, there is no one to entrust the bank with its savings
As there is no guarantee that the bank will be able to repay them. In order to avoid situations where the borrower is no longer able to repay the loan, the bank really does check the customer very carefully and for a long time. And that is why loans with bad credit history are not issued on the Internet.
The borrower must meet the bank employee individually, discuss all the formalities and options for getting the money back; Of course, first of all the bank has investigated all the customer’s credit liabilities and income. Strict checks are also why it takes several days to get a loan from a bank.
Likewise, during the individual negotiations, the interest rate of the loan is set, as it can vary from client to client; an appropriate repayment schedule and other formalities are also negotiated. All of these steps are much more difficult if the communication between the borrower and the lender is purely electronic; it is also more difficult to evaluate the customer himself.
Based on all these considerations, banks do not offer loans online
If you are not ready for all the paperwork, rigorous checks and waiting a few days, you can apply for a loan from private lenders. In such cases, although the money is paid out faster (of course, if the person meets all the criteria set by the creditor), and the prospective debtor does not even have to meet the lender individually and spend his time, it should be borne in mind.
Also, customer evaluation is less rigorous and careful, so the risk of not being able to repay the loan may be higher.