Busting 5 Myths about Non-Bank Lenderssupport
When people think of applying for a loan, their first thoughts instantly lean towards getting in touch with their bank. This has always been the conventional way of obtaining finance, however, many Australians are now considering “private” or non-bank lenders.
Similar to traditional banks, non-bank lenders provide financial products such as mortgages and loans, but they are more likely to work with you based on specific needs and have a typically shorter application process and settlement.
Pacific 8 bust the top five common myths when it comes to non-bank lending and finance.
Myth #1: Non-Bank Lenders are Untrustworthy
The truth – Non-bank lenders in Australia are regulated by ASIC (the Australian Securities and Investments Commission). ASIC require non-bank lenders to be upfront with rates and fees, so the information you need will be readily available to you as an investor.
Myth #2: Non-Bank Lenders Only Help Those with Bad Credit History
The truth – Non-bank lenders deal with individuals from all walks of life, and they may have a product suitable for an individual’s particular situation when a major bank does not. Types of individuals who may choose to use a non-bank lender include self-employed and property investors.
Someone may apply for a non-bank loan if they are finding it difficult to satisfy the strict lending criteria of big banks, such as a self-employed person.
Myth #3: Non-Bank Products Are More Expensive
The truth – Most believe that the pricing of loan products offered by non-bank lenders are higher than those offered through traditional banks, but the reality is, non-bank lenders may be more competitive with their products and rates.
Myth #4: Non-Bank Lending is Riskier
The truth – The myth that non-bank lending is riskier comes from the idea that individuals seeking this form of lending are using it as a last resort for high risk and poor-quality projects. Non-bank lending in Australia is mostly regulated and is a highly secure method to raise finance, provided that legal contracts are in place.
Presently, non-bank finance plays a substantial role in supporting the property development industry. According to data from the Australian Bureau of Statistics on lending by managed funds to non-financial corporations, non-bank loans are growing quickly at $41 billion compared to $225 billion from traditional bank finance.
Myth #5: Non-Bank Lenders Have A Limited Product Range
The truth – Australian non-bank lenders provide loans to clients for a wide range of purposes, and they are more likely to be personalised to your needs and circumstances rather than a standard “one size fits all” product.
Whilst this type of lending requires you to demonstrate the feasibility and expected return of a project, the advantage is that these lenders can offer competitive interest rate loans, private mortgages, short term loans and more.
Get in Touch with Your Non-Bank Lender Specialist
At Pacific 8, we offer products from private mortgages, short term loans and caveat loans to help you achieve your financial and investment goals, and having settled over $500 million, we have built up a large portfolio of satisfied clients.
If you are considering applying for a non-bank product, or curious about what this type of loan could do for you as an investor, call us on +61 2 8188 1170 or organise a consultation with the professionals at Pacific 8 today.