Private loans versus bank loans

Published by Nancy Reilly on

Not all credits are granted by banks, nor are all credits equal. There are bank loans, which are traditional loans that can be requested at the bank and that has its own concession, return and interest characteristics. And there are private capital loans such as those granted by hemibank and whose characteristics have made them especially popular in recent years.

Differences between bank loans and private loans

Differences between bank loans and private loans

Before making a comparison between traditional bank loans and innovative private loans, it is interesting to establish the concepts and differences that justify opting for one or the other.

Personal loans are a banking product by which an applicant is granted a certain amount of money subject to certain terms of return and interest due to the aforementioned deadlines. In this type of loans there is no real guarantee, as there is in a mortgage, but the lack of the guarantee is replaced with a higher or lower fee, in addition to the contracting of associated products such as insurance, payroll and other conditions established by each bank.

Private loans come from the United States. In Spain and in Europe they can be considered relatively young. The modality allows a person to request money from a company, establishing a return period and an additional amount for fees. This credit system has become popular thanks to the Internet. Medium that facilitates transactions and streamlines processes without the need to go to any office. In hemibank we have optimized the process until we can offer a quick mini loan with the money available in a matter of minutes.

Comparison between bank loans and private loans

The interest rate is one of the differences between personal bank loans and personal loans from private entities. If during all the time that banks have closed the tap of financing to companies and relatives, they have proven the advantages of private equity loans, now banks try to attract customers again, although their interests are not attractive.

In bank loans, the interest rate is around the two figures. Between 9 and 12% most banks are located, while the “online” entities have reduced prices and lower the interest rate to the European trend, placing interest around 6%. In the case of microloans, we prefer to use a formula that does not reflect an annual interest rate such as the APR, since its term is of days and it does not make sense to transfer its interest to one year. Our clients pay a fee that they know from the beginning. That way they know how much their microloan costs them without having to make calculations.

There are also differences in the requirements that entities and others request to grant credit. Although many banks have lowered their requirements, such as asking their clients for a minimum period of time, they still have many more requirements than those requested by private credit institutions.

Regarding the loan request response, private lending entities take “the cat to the water”. Thanks to new technologies and simplification in concession systems, companies like hemibank can solve loan requests in just minutes. Something that traditional banks are far from achieving, although they work with the concept of “pre-granted credit”, in fact they still require extended time to dispose of money.

Comparing bank loans and private loans, a notable difference can be observed: the ability of private capital companies to adapt. In spite of the fact that the big banking is increasingly having a presence on the Internet, it is the private credit companies that have achieved an optimization of the processes until doing all the paperwork “on line”, without papers, in less time and greater disposition.

In short, if you think about it, hemibank is the best place to request a private loan, with which you have in minutes up to € 500 to return in 30 days. Find out and we will solve all your doubts.



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