When considering a loan, the instinct might be to head straight to a bank, lured by potentially lower interest rates. However, there's a compelling case for why opting for a personal loan company, like Save My Bacon, might actually serve you better, even if the interest rate is higher. Here's why:
Speed and Accessibility
Personal loan companies, like Save My Bacon, often operate with a leaner model compared to traditional banks, which means faster approval times and quicker access to funds. This can be crucial in situations where time is of the essence, like emergency repairs.
Flexibility in Loan Terms
While banks might offer lower interest rates, they often come with rigid terms. Personal loan companies, especially those online, might offer more flexible repayment schedules or even allow for early repayment without penalties. This flexibility can be tailored to your financial situation, potentially saving you more in the long run through interest savings or better cash flow management.
Less Stringent Requirements
If your credit isn't stellar, or if you're self-employed with fluctuating income, banks might be less accommodating. Personal loan companies, like Save My Bacon, might look at your broader financial picture or offer loans based on future income potential, making them more accessible for those who don't fit neatly into traditional credit boxes. Subject to responsible lending.
No Need to Secure Against Assets
One significant advantage of personal loans from specialised companies is that they often do not require collateral. Unlike banks that might ask you to secure the loan against your home or other assets, personal loan companies, like Save My Bacon, offer unsecured loans. This means your home or car isn't at risk if you can't repay, which can provide peace of mind and protect your major assets.
Innovation in Loan Products
Personal loan companies, like Save My Bacon, often innovate with loan products that might not be available at banks. This could include loans for specific purposes like debt consolidation, home improvement, or even personal development (like education or health) – with features that might not be offered by banks.
The Cost Beyond Interest
When considering the total cost of borrowing, look beyond the interest rate. Banks might charge for application fees, origination fees, or have hidden costs like prepayment penalties. Personal loan companies might offset higher interest rates with fewer or no fees, making the overall cost of the loan competitive or even lower.
Customer Service and Relationship
Personal loan companies, particularly those that are smaller or niche-focused, might offer more personalised service. This can mean easier negotiations for terms or even rates if your situation changes. Banks, especially larger ones, can sometimes feel impersonal, with less room for negotiation or customer-specific adjustments.
Conclusion
Choosing a personal loan company over a bank isn't just about the interest rate; it's about the entire borrowing experience. From speed, flexibility, and customer service to innovative loan products and potentially lower overall costs when considering all fees, the advantages can outweigh a slightly higher interest rate. Always compare the total cost of borrowing, including fees, and consider how each lender's service model aligns with your needs and financial health. In many scenarios, the personal touch and tailored services of a personal loan company might just be worth that extra percentage point.
