Importance of Applying for a Loan from Financial Institution
There are many reasons why people take loan it could be used for business development, build a house, pay current and daily expenses or for emergency purposes such as sort medical bills. Loans are therefore an essential aspect of our lives because in case of an urgent need for cash we can get access to money quickly. There are many institutions that give people loans. You can apply for a loan from banks, financial institution and even from friends, family members, at work or even from SACCOs. However, all these sources have various benefits and limitations.
Traditionally many people use to take loans from banks. However today there is a change as most of the people prefer loans from financial institutions as opposed to banks. This is because there are many advantages to taking a loan from a financial institution as opposed to commercial banks. This article, therefore, explains some of the reasons why an individual can prefer a loan from a financial institution and not banks.
The first reason why many people like taking loans from financial institutions are because they have a simple and easy application process. Banks will need an individual to undergo a thorough and rigorous loan application process before issuing the advance. In case you want a loan from a bank, you will need to avail yourself to the nearest bank branch to fill out the manual application forms. On the other hand, when applying for a loan from a financial institution, there is usually a simple and straightforward process that does not involve filling of any form.
The second importance of getting a loan from financial institutions is that they have a faster approval process when compared to banks system that takes several months. Financial institutions approve loans faster than banks. For an individual taking a loan from banks, the minimum wait time is their months and in some cases, it can even be longer than that. On the hand, financial institutions approve their loans within a day. Therefore when you want cash urgently to sort out emergency issues such as medical bills, getting a loan from a financial institution is the best option because they have a minimum wait time.
The third benefit of taking a loan for a financial institution is that they offer flexible loan amounts as opposed to loans provided by banks. Financial institutions will give a loan based on your project and the viability of your idea whereas banks use your savings and your pays slips to calculate loan amounts.
In conclusion, getting a loan from a financial institution is actually better than taking a loan from a commercial bank as explained in this report.