Advantages and Disadvantage of Borrowing Through you Current Bank

If you are looking for a loan then the first place that you might look could be your current bank. There are some advantages to doing this but also some disadvantages and it is worth being aware of both before you make a decision as to whether you want to go with them or not.

Advantages

You will be familiar with how your bank works and it is likely that you will trust them or else you would not continue to bank with them. You may also know the staff at the local branch or just be happy that there is a branch available for you to go in if you need help with anything, if you indeed have a local branch. You will also be used to how to communicate with them when you have a problem, whether this is online, by telephone or face to face.

When you take out a new financial product it can be hard work as you have to provide lots of documents as identification so that they can do all sorts of checks on you. However, if you already bank with them, this will not need to be done and so it could speed up the whole process of getting a loan for you.

It is very convenient using your current bank. You will also not have the hassle of having to compare different lenders or lenders which offer multiple products such as Omacl and work out which you think will be the best for you and try to understand more about them and the products they have. You will avoid the cost of a financial advisor if you do not understand your options as your bank will be able to help you out and explain this to you.

Disadvantages

As there are many lenders around then it is probably that there will be one available that will be cheaper than your current bank. This means that you could be better off by using them rather than going to your bank. If you are borrowing a significant amount of money or for a sustained period of time then these savings can really add up and it is worth calculating what the difference might be. They could differ in other ways as well, perhaps providing better customer service, having a better reputation or being more flexible with regards to repayments. It is good to investigate all of these things and consider what is important to you with regards to borrowing and whether your bank can provide you with everything that you need. If you are unconfident about doing this research yourself then you may need to pay a financial advisor to help you. Although they can be pricey, you can make back more money than you are paying for them by choosing a significantly cheaper loan. This will all depend though on how much you are borrowing and how long for. With a mortgage it could be well worth it but for a short-term loan it is unlikely to make enough of a difference to be worth it.

It can be difficult stepping away from the security of a bank that you know, especially if you have used them for a long time. However, even if you take out a loan with another lender and change your mind, you may be able to do so. It can be possible to switch lenders midways through the term of a loan, by borrowing elsewhere and using the money to pay of the existing loan. You will have to check that this is an option before taking out your loan though as not all loans are this flexible or they will have high charges for repaying early.

It is therefore not worth just going with your bank and ignoring everyone else. You need to see what everyone else is offering first in order to work out which seems to be the best for you. Although it is understandable that you may want to stick with your bank, you could end up getting a better service, a product better suited to your needs and a cheaper product. It is important to think about all of these factors when you are looking for a loan.

You could just quickly use a comparison website to look at how much others are charging with regards to interest and this will be a start. You will then see how much you might be able to save (although there are other costs as well as interest to consider such as administration charges and early redemption & late repayment fees). Then you will know whether it really is worth doing a lot of work to see where you can get the best deal or whether using your bank will not cost you significantly more money. This will not take long and it is worth it as it could lead to you making significant savings.

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