Non-Bank and Bank loan lending differences!

When it comes to financing, the borrower has to know the differences between the non-bank and bank loans to make the right decision. Both non-bank and bank lenders have their pross depending on the borrower situation. Be smart about your choices!

We will talk about:

  • Borrowing and repayment time
  • How much to borrow and Borrowing reasons 
  • Document obligation differences (unsecured or secured loan)

If you would like to know the differences keep on reading!

Borrowing and repayment time


Non-bank loans can be applied to and received in minutes or up to 24 hour period depending on the time its borrowed and the lender. Which makes online loans appealing for fast financial solutions. Lenders will look through your application in minutes and will let you know the results as soon as possible. More importantly, clients can apply from home online. You don’t have to leave your house to resolve your financial issues. 


Bank loans will take a lot longer to be able to apply and receive your loan. The application process will take from 15 – 60 minutes, approval time can go from same day to several days and fund receiving can take from the same day to several days. It is easy to say that banks can take some time to deliver a final decision about your loan. 

How much to borrow and what loan is for?

It depends on both non-bank and bank lenders as each company offers different lending amounts. But most of the time there is a big difference. Overall, if you are lending from online loan lender you will borrow a smaller amount than if you would borrow from the bank. 

What is it for?

The reason behind it is that non-bank loans are used for everyday purchases like:

  • Car fixing, 
  • Boiler replacing 
  • Or laptop buying in case your old one broke and you need a replacement as soon as possible

Bank loans for bigger investments, like:

  • To buy a car
  • To invest in property/ house/ apartment buying
  • Renovations


Non-bank loans will offer an amount that is realistic to repay in a month to a couple of months. Depending from a lender. 

The bank loan amount can be high depending on what money is for. And the repayment process can go from months to years as the repayment schedule is made considering clients average monthly salary. 

Documentation differences

Documents in non-bank and bank loans make a significant difference in the applying and the receiving process. 

Most non-bank lenders ask for some type of personal identification document, mainly, ID card. As online loans mostly are unsecured, clients do not need to provide a collateral or any other documentation. Which makes non-bank lending easier and faster.

On the other hand, bank lenders ask for a variety of documents and income statements/ history, guarantors for deeper analysis. As bank loans offer higher loans the responsibility grows with it. For both lender and borrower. Bank loans are secured loans which mean that you have to put down a security deposit, most of the time, your home. It is important to repay the loan on time, it’s a commitment, otherwise, the bank can take your home as payment. 

Overall, it is easier for a borrower to borrow from a non-bank lender for less fuss and stress. However, it depends on each individual borrower to meet their necessities. 


It is vital for a borrower to know which option is better for their needs. Yes, non-bank loan interest rates may be slightly higher than banks. But you can receive a loan in 24 hours. When a bank can offer a slightly lower interest rate but you have to repay the loan for much longer and the approval process can take 3 times longer. However, it all depends on the purpose of the loan as non-bank loans and bank loans are used for completely different reasons.