The basic advantage of entrusting savings to a traditional bank is a guarantee of security. The desire to secure capital was the reason for establishing the first banks, and the most important criterion determining the choice of institution was its credibility.
Modern banks have excellent systems ensuring protection of property in the event of a possible bankruptcy or loss of money by the bank in any other way. The Insurance Guarantee Fund is one of the mandatory collateral that an enterprise must offer. By entrusting money to such an institution you can be sure that they will be well protected and the client will have unlimited access to them.
The situation of parabanks is slightly different. Due to activities not subject to banking law, the quality of collateral is much lower.
Based on the unpleasant experience of the recent past, it is easy to see that offers tempting with benefits that differ significantly from market standards should be approached with reasonable distance. This does not mean that every non-banking company included in the group of parabanks is intended to extort money from gullible customers.
Bank loan – disadvantages
However, using traditional bank services has significant disadvantages. They concern, among others, candidates for borrowers. The purpose of creditworthiness verification is to minimize the risk that the customer will not be able to pay his debts within a given contract. This stage often disqualifies an applicant from a bank in a bad financial condition. One of the solutions then is definitely to get a non-bank loan. A quick, convenient way that does not require detailed verification of the income of the person concerned.
On the other hand, extremely risky. Interest can be huge, especially if the customer fails to pay the agreed amount on time. Sometimes, the amount to be paid increases by up to several hundred percent. Therefore, it is not recommended to make an ill-considered decision to use the non-bank loan offer. If you are not 100% sure that it will be possible to pay your debts before the deadline, it is definitely not worth concluding this type of contract.
When considering the offers of individual types of the bank, it is easy to notice the fundamental difference between them. While traditional banks focus on security and financial solvency, non-bank institutions enable easy and quick access to services. Therefore, the choice is up to the customer and depends on his priorities and expectations towards the banking institution.