When in need of money, there are various financial options available to consumers today. The two major resources are the bank and a lending institution. However, not all consumers can avail of the services of both institutions. Even with good credit history, not every aspiring borrower can be approved of his or her loan application most especially from a bank.
It’s unfortunate that in the USA, banks have given their thumbs down to people in the low income segment. This is despite the fact that they have favorable credit records. There have been cases of personal loan applicants who approached a bank but were turned down. Some of them were even employed and were regular savers. The only issue was that they had no real credit history.
After being declined by banks, those borrowers approached the lenders which accommodated them. Those approved never missed paying back their monthly dues which earned them a good credit score from lenders.
Receiving a positive credit rating from a lender, however, does not guarantee bank approval of another loan application. This issue has bothered many consumers saying they don’t get the point why banks turn them down when they have proven to lenders that they are able to repay their loan well.
To enlighten you on this matter, according to banks, they don’t apparently trust borrowers who have turned to short term personal loan providers. They point to their computer system as the main judge when it concerns loan applicants who were clients of short term lenders. They see people, particularly the low income earners, who have availed of those types of loans as not reliable as they are likely to default.
On the part of the consumers, many have been greatly discouraged in approaching banks for loans. Apart from the long list of requirements, banks have strict policies such as they easily apply charges to even just one late or missed payment and one bounced direct debit. Additionally, borrowers don’t like the way banks deal with them being not friendly and not flexible enough to adapt to their clients’ needs.
On the other hand, short term lenders are very accommodating, friendly, flexible and easily accessible. With many personal loan providers now on the internet, consumers can apply conveniently and easily even the comfort of their homes. All they have to do is just fill up the online registration form, submit a few requirements, pay the fee, and wait for a few hours to be approved. Loans can be released in a matter of several hours.
Sadly, the banking industry in the USA has not acted on the government’s advice to get credit moving. So if you are a low income earner wanting to borrow money for your immediate needs, the better alternative is go to a short term lender instead and apply for a payday or cash advance loan. It may be worth going directly to these personal loan providers rather than waste your time consulting with a bank when in the end, you’ll just be turned down. Just keep in mind to be responsible enough and pay your loans on time to establish a good credit record moving forward.