We all certainly know what a bank is and what it deals with, at least in general. Perhaps not everyone is aware of the fact that banks very often also provide personal loans . Let’s find out how the personal loans of the banks work and what are the differences compared to a financial one.
What is a bank?
We have all been involved, at least once in our life, with a bank. According to the definition, the bank is an institution that deals with the collection of savings (with private citizens, companies, institutions or other subjects) and reinvest it through a variety of instruments. Among the services offered by the banks there are also loans, loans and mortgages, even if here we will deal only with the first product. Both traditional banks and online banks offer a variety of personal loans, with different characteristics depending on the bank chosen and the specific product.
Bank vs financial: the differences
However, the bank is not the only person authorized to issue personal or online personal loans. In fact, the work of the banks is supported by a different subject, that is, the financial ones . The characteristics of credit and financial institutions are different, especially for the multiplicity of services offered by banks. However, these two subjects are not different from each other as regards the specific area of personal loans. From a theoretical point of view, those who need a personal loan can therefore apply equally to a bank or a financial company, whether they work offline or online.
When to contact a bank for a personal loan?
In the previous paragraph we said that from the theoretical point of view there is no difference between a bank and a financial institution for those who need a personal loan. This is certainly true, but there is a case where turning to a bank for a loan could be more beneficial .
We refer to a situation that is not rare, that is, in the presence of a consolidated relationship with a bank, for example by a person who for several years has a current account at the same bank (and perhaps without ever having changed a branch) . In this case it is probable that a relationship of trust has established between the bank and the client. First of all, contacting the bank for the loan application could be advantageous, as the bank could positively assess the request of the subject also based on the relationship of trust established. However, the conditional is a must, since in many cases having a long-term relationship with a bank is not at all equivalent to obtaining a loan more quickly, and there are many cases of banks that grant loans (or deny them) regardless from this factor.
How to ask for a personal loan in the bank
The request for a personal loan to an online or traditional bank (or operating on both channels) is not different from the loan request to a financial institution .
First, at the time of the request, the bank requires that the person applying for a personal loan provides their identity documents , together with the residence permit in the case of a non-EU citizen. Together with the identification documents, the bank requests the presentation of an income document, such as the last paycheck , the pension slip, or the last tax return presented.
In addition, the presentation of a paid user , such as an electricity or gas bill, is often required to prove the actual place of residence of the applicant. Once the documentation is received, the bank begins the evaluation of the file and eventually requests that further documents be provided. This process is valid both for online banks and for applications made at a branch. Following the evaluation of the practice, the customer is warned of the approval or rejection of the same.
If the personal loan is refused, it is always possible to make a new application, paying attention, however, not to make one of the most common mistakes among those looking for a loan.