What are non-bank lenders and how do they work?
A non-bank lender is a type of lender outside of traditional banks, credit unions and building societies, who are all Authorised Deposit-Taking Institutions (ADIs). There are several different lenders that can fall under this category, which include:
Online (or direct) lenders are privately owned and operated, and are often more specialised in terms of the products that they offer: some offer personal loans and little or nothing else, as opposed to the suite of products that a bank can offer.
Where they differ most, though, is their more inclusive lending criteria. These are often one of the only options, if not the only option, available to borrowers with bad credit or who don’t meet traditional lending criteria relating to their income documentation (such as self-employed workers).
While these particular products come with higher fees and rates, online lenders’ products are also generally offered at a lower overall cost than those of banks. This alone could save you hundreds or thousands of dollars over your loan term.
You can compare some of the best and most affordable non-bank personal loans from our panel of online lenders right here with Savvy. Contrast loans based on their interest rates, fees, loan terms and borrowing amounts to help you save more on your personal financing.
New to our shores, peer-to-peer (P2P) finance is the one of the most unique types of lending in Australia. Unlike standard lending applications that are submitted online to a particular financier, P2P lending involves submitting your application to a specialised website to enable its review by individual investors or firms who can anonymously approve your application.
The same general checks are still conducted with these loans, but they are also lenient in terms of their criteria, enabling bad credit customers to pursue them as an option. It’s important to note that P2P lending host sites are designed to get deals done, so you can experience a fast turnaround on your application.
Additionally, P2P are amongst the best non-bank personal loan options on the market when it comes to lower rates and fees that they charge on personal loans, meaning they can be another cheap option for your personal finance needs.
How do I compare the best non-bank personal loans in Australia?
The type of lender
As discussed above, it’s important to get a handle on the different types of lenders available to you. Both online and P2P lenders are able to provide fast access to your loan funds and can offer more lenient lending criteria for borrowers who aren’t able to get a loan through traditional lenders.
Each lender will have different requirements when it comes to how to qualify for a personal loan, so it’s worth reviewing this in addition to whether you want your application assessed by a lender or a series of investors.