5 Reasons Why You Should Borrow Money from Private Lending Companies

There are instances when you will need money to finance certain needs of the family. Apparently, your salary as OFW is not enough to purchase in full your dream house or finance the business you plan to put up. That’s okay. You can always turn to banks to help you finance your needs (with interest, of course).

Apparently, traditional banks are not your only option in case you want to apply for a loan. Over the years, private and independent lending companies are on the rise, giving not just OFWs but also potential customers more options in terms of lending.

The next question is this: which is better, traditional banks or private lending companies?

Here are reasons why you need to consider private lenders too:

1) Easier and faster approval

All lending companies, whether traditional banks or private lenders, are regulated by the Bangko Sentral ng Pilipinas (BSP). Nonetheless, banks follow stricter regulations and implementations that reduces the chances of small and starting business owners to put up their business.

This is why private lending companies can be helpful. Approval is easier and faster because of the lesser restrictions and requirements imposed.

2) More affordable loan processing fees

Between banks and private lenders, the former has lower interest rates. Here’s the catch: banks can be opportunistic and look for other ways to earn money. At times, they get it from processing fees.

That’s not all. Banks would often deduct the fees from the loanable amount. This means if you borrowed P100,000, you won’t get the amount in full since the fees were already deducted.

This is a different case when you apply in private lenders. Private lending companies like Balikbayad has affordable processing fees and will not deduct the fees in the amount you borrowed.

3) Offers competitive rates 

Banks will say that their interest rates are lower. That’s true. On the other hand, private lending companies provide competitive rates that will suit your financial needs and capacity to pay. The rates may not be lower than what banks offer, but as long as you use the money in the right investment, you won’t even notice the difference.

4) Loan terms are customized according to borrower’s needs

Traditional banks are often subjected to both internal and external audit. This is why it is important that all the requirements set forth by the Monetary Board are complied with. Any lacking documents could delay your loan application and even compromise approval.

This is a different case for private lenders. Loan requirements can be patterned according to borrower – as long as the basic requirements are met such as age and proof of income. In other words, requirements are more flexible and easier to comply with.

5) A good boost in credit history

Banks are strict when it comes to credit history. Anything negative in your credit score could make them think twice on whether or not you are worthy of credit. Thankfully, private lending companies look at it differently, although credit score still matters.

The good thing about borrowing money from private lending institutions is that it allows you to boost your credit history. Just make sure you will fulfill your financial obligations by paying on time and in full and your are good to go.

In case you are looking for a private lending company, consider Balikbayad among your options. It makes lending easier and more affordable for every OFW.