Quick Loans vs Traditional Bank Loans in Ireland: Pros and Cons
When you need quick loans for urgent needs like car repairs, you explore the best options. Banks, credit unions, and direct lending companies are often termed as the most popular loan options. Approaching a bank for an instant loan may help you get up to €30000 within 3-24 hours. For example, Bank of Ireland provides loans within 24-48 hours. However, with direct lenders, you may get the loan within minutes. But the payout remains less.
Quick loans Vs. Traditional banks: How do they operate?
Getting a quick loan from loan companies in Ireland involves filling out a simple form and getting an instant quote. You need to analyse the affordability, and once you find it all right, you may proceed. The loan company may conduct a credit and affordability assessment online.
They review your documents like bank statements, credit reports, income and renting through the open banking system. Thus, it nullifies the need for manual documentation submission. Everything happens online -from the form filling to the fund transfer.
A traditional bank loan, on the other hand, is a brick-and-mortar business. One needs to meet the loan provider in person to get the loan. You may need to provide every document manually to qualify for the loan. Moreover, the document requirements and process of loan approval is little longer than those with direct lenders. Unlike the automatic application analysis process, the loan provider manually reviews the credibility through documents.
Quick loans Vs. Traditional banks: Loan amounts
You generally qualify for the maximum value of €5,000 on quick loans. Similarly, you can get €40000-€100,000 with credit unions. However, you need to be a member of a credit union to qualify for the loan. Alternatively, one can tap loans from direct lenders for small and short-term life requirements. If choosing the right one gets tricky, check a loan broker online.
They may help you find the right online loan company that matches your needs and financial situation. For Example, GiveMyLoan connects individual borrowers with the private lender that shares expertise in assisting individuals with providing a loan despite certain financial issues.
With banks, you may qualify for €1000-€75000 as a loan from traditional banks. You may consider it for bigger life goals like paying for a mortgage deposit, home renovation, or replacing car parts, etc. However, the amount you get depends on :
- Credit score
- Existing pending payments
- Income stability
- Loan type
Quick loans Vs. Traditional banks: Interest rates
Interest rates on quick loans may vary from 6%-15%. The cost of borrowing a quick loan is generally high due to the ease of loan application and approval. One does not need to deal with detailed documentation, provide collateral or a guarantor to qualify.
It thus helps you get a loan quickly online. Moreover, one gets the loan online from any corner of the country. Individuals with good internet and open banking facilities may get the loan instantly.
However, getting a quick loan from a bank is relatively cheaper. One may get one at interest rates starting from 5.0%-19.9%, depending on the loan amount, term and the loan company. For example, the Bank of Ireland provides quick loans at a rate of 7.1%-8.9%. Moreover, the rate falls as you opt for a higher amount.
Quick loans Vs. Traditional banks: transparency
Most loan companies providing fast approval on loans in Ireland offer transparent terms. It helps the loan provider analyse whether the loan is right for them or not.
As a part of standard aspects, every financial institution must keep the terms transparent to provide lending services. If partnering with a loan company, check whether it is licensed or not. It may help you avoid paying unnecessarily on the loan. If you struggle, then a verified broker may help you.
Moreover, high-cost credit providers should not charge any administration fee to provide the loan. Therefore, if dealing with a regulated loan company, you should not fear paying anything upfront. Avoid dealing with the loan companies asking for upfront charges.
The loan companies may change the terms slightly according to their morals and values. However, affordability and responsible lending must remain the base.
Quick loans Vs. Traditional banks: Eligibility criteria
Qualifying for quick personal loans with a bank is generally more challenging than with online loan providers. It is due to the rigid, comprehensive and stringent eligibility criteria that the borrowers must meet to qualify for the loan.
Banks generally have a more conservative process in comparison; the private loan companies provide more flexibility on the loan. It prioritises the individual’s comfort while developing the repayment schedule.
Moreover, individuals with bad credit histories are less likely to qualify for bank-based loans. Loans from private online loan companies offer special amounts, repayment terms, and eligibility criteria for individuals with poor credit.
They focus more on the current ability to repay the dues than on past credit mistakes. Hence, an individual has more chances of qualifying with a direct lender with bad credit than with a traditional bank.
A well-regulated loan broker like Givemyloan helps compare the terms and interest rates and provides the best loan provider with whom the loan applicant may fetch better terms. They help with documentation and discuss the issues on the borrower’s behalf with the loan provider.
It thus helps one get well-educated, quick loans in Ireland for bad credit from just the right person. Later, the borrower may discuss the issues with the respective private lender regarding the repayment concerns directly.
Quick loans Vs. Traditional banks: Repayment flexibility
Most online loan providers offer the facility to pay the full amount early on variable-rate loans. One can also pay extra on loans without prepayment penalties. It may help one save money on interest rates and overall dues. However, not every loan company offers the flexibility to pay early. You may need to find one that does. Using a middleman for that may help you.
Similarly, most banks, like Bank of Ireland, offer the option to delay instalments for 3 months. Some banks may even offer the option of repayment holidays. However, it is generally possible only on mortgages.
Bottom line
Thus, you may consider the difference between borrowing a quick loan and a traditional bank loan. It may help you know whether you should choose a bank, a direct lending company or other sources of financial loans to get a loan.
Contacting a bank is ideal if you need a higher amount with a face-to-face interaction. Alternatively, for a smooth, online and no documentation process, you can check an online lender. If you struggle to spot the right one, contact experts.
Ava is Editor-in-Chief at Givemyloan and is known for her deep and practical approach to modern personal finance. She has written several articles covering topics like personal loans, business loans, etc. Coming from an economics and finance background, she has worked behind the scenes to curate informative content to help borrowers identify the right loan option.
Ava’s role at Givemyloan lets her combine her interest in writing with her curiosity to explore the finance realm. She likes to be updated about what is happening in the lending industry. Most importantly, she tries to instil her knowledge in her writing in the best way possible.
She is passionate about helping borrowers look beyond the general features of a loan, i.e. about the fees and other intricate details. When she is not writing, she likes to read contemporary fiction. She is on a mission to help educate people looking for loans so that they take the right route.
