Have you ever wondered what the difference is between bank loans and IFNs? In this article we present the differences between them, as well as other features of non-bank loans.
We know that when it comes to a loan, the impulse is to call a bank. However, depending on the type of loan you need, we suggest that you also consider the IFNs, which can grant very advantageous loans, for which you must make a minimum effort.
What are IFNs?
According to the NBR, non-bank financial institutions (IFNs) are “entities, other than credit institutions, that carry out professional lending activity, under the conditions established by law”. Attention, all the IFNs are supervised by the National Bank, so you do not have to worry about the quality and security of the services offered.
What types of loans can you access through IFNs?
According to the law no. 93 of April 8, 2009, the IFNs can offer the following services:
- granting loans, including, but not limited to: consumer loans, mortgages, real estate loans, microcredits, financing of commercial transactions, factoring operations, discounting, leasing;
- financial leasing;
- issuance of guarantees, assurance of collateral commitments, assumption of financing commitments;
- granting loans with receipt of goods in pledge, respectively arranging through pawnshops;
- granting credits to the members of associations without patrimonial purpose organized on the basis of the free consent of the employees / pensioners, in order to support by financial loans of their members by these entities, organized in the legal form of the mutual aid houses;
- other forms of credit financing.
Bank Credit vs. IFN Credit
Because financial education is poorly developed, in most cases, people have preconceived ideas about banking and non-banking financial institutions and, therefore, about the loans offered by these two types of institutions. Thus, the most important differences between loans offered by banks and those offered by IFNs and non-banks are: the duration of the analysis of the credit file, the period of granting the loan and the amount you can borrow.
Through the IFNs, the maximum amount you can get is generally lower than the amount you can get through banks. In addition, the repayment period is generally shorter, about 3 months, but can reach up to 1-2 years, however, in the case of banks, the repayment period can be extended up to 5 years, depending on the amount borrowed and the type of credit.
What are the advantages and disadvantages of IFNs?
In a previous article I presented you the main advantages of loans offered by non-bank financial institutions. These include:
- Simple and fast credit granting;
- The small number of documents required;
- Short time for file analysis;
- Obtaining credit online, without moving and queuing.
And among the disadvantages of lending through IFNs are:
- Maximum amount offered;
- Loan repayment period.