Loans have many numerous uses and can be used for business expansion, paying emergency expenses such as medical bills, buying a home, and paying for current expenses such as utility bills. Loans are therefore essential because it helps us sort out our needs for money even when we don’t have cash. There are many institutions that give people loans. There are many organizations that can offer you a loan these include banks, other financial institutions that offer lending services, and even ask for a loan from your friend or family members. These avenues of getting money to be used for emergency purposes have various benefits and disadvantages.
In the past, many people trusted the commercial banks and use to get loans from these institutions. Currently, there has been a shift as many people right now prefer taking a loan from a financial institution rather than the banks. There are many benefits of taking a loan from financial institutions than applying for bank’s loans. This article, therefore, explains some of the reasons why an individual can prefer a loan from a financial institution and not banks.
The primary advantage of applying for a loan from a financial institution is that they have a simple and easy application process. Banks will need an individual to undergo a thorough and rigorous loan application process before issuing the advance. When applying for a bank loan, you need to be there personally and fill out the application forms. Financial institutions will give you a loan without filing manual application forms because they provide online services.
The second importance of getting a loan from financial institutions is that they have a faster approval process when compared to banks system that takes several months. Financial institutions will approve your request quickly than banks. For an individual taking a loan from banks, the minimum wait time is their months and in some cases, it can even be longer than that. When it comes to the financial institution, the loan is approved within twenty-four hours. This makes it a good option for people who need money urgently for instance to pay medical bills.
The third importance of getting a loan from a financial institution is that you will get flexible loan amounts as opposed to banks that offer rigid loan amounts. Banks provide loans based on individual savings with them and therefore provide fixed loan amounts as opposed to financial institutions that will give you a loan as per your requirements.
In conclusion, getting a loan from a financial institution is actually better than taking a loan from a commercial bank as explained in this report.