The first word that comes in every mind, when talking about consumer lending is a bank. In fact, many people have no idea that, apart from banks, many other options to existing for consumer lending. The alternative options are also very fast and efficient just like banks. These alternatives also provide some exceptional benefits that even the banks do not provide. Given below are some best and award-winning alternatives to banks for consumer lending:
Borro is an online lender that offers loans secured on assets like luxury cars, diamonds, and other valuable assets. The consumer willing to get a loan can put the asset as collateral and get more than fifty per cent of the value of the asset. As soon as one applies for a loan online, Borro initiates the process and after taking the possession of the secured item, it transfers money to the consumers’ bank account. The consumer can return the loan within several months. If the consumer fails to repay the loan within the specified time which is mostly within ten months, Borro sells the secured asset and recovers the money on its own. So, the first alternative to bank for consumer lending is an online lender named Borro.
Non-Banking Financial Companies
Non-banking financial institutions are also called nonbank banks. They are not a full-scale bank because they are not engaged in the process of both lending and depositing. They are only involved in lending only. Such financial institutions offer mortgage loans, home loans, and many other consumers loans at some terms. An example of such a company in the market is the Non-bank lender Wingate whose financial performance is not affected by the loans it provides.
Peer to Peer Lending
The peer to peer lending involves lending money directly from one individual to another or from one business to the other. The consumer can borrow money from a friend, relative, or colleague without involving a bank. The lending of money can occur with or without any condition. One can also get the loan by securing an asset against the money. The only risk associated with peer to peer lending is the risk of bad debt.
Almost everyone is well aware of the name of the lending service PayPal. PayPal provides loans to businesses and consumers. You just need to fill an online questionnaire and select the desired amount that you need for a loan. If the amount and application are accepted, you have to sign an electronic contract and have to provide your bank instructions so that the amount of loan can be debited or credited easily.
The last alternative for a bank is Moneytree. Nowadays Moneytree is functional in many states. It offers short term as well as business loans. In case of emergency, consumers can lend money from Moneytree. It charges some amount of fee that depends on the amount borrowed. The amount of money borrowed can be returned either wholly or in parts i.e. in instalments.