With the exception of loans granted among friends and relatives and employer loans, all loans are granted by banks. For legal reasons, even personal loans brokered via the Internet are processed through a licensed bank. Other exceptions are payment terms and installments agreed directly with a supplier, which are hardly perceived by private individuals as loans. In common usage, borrowing from banks means that a loan is applied for directly in the branch and not via the Internet.
Why applying for a loan in a bank branch often makes sense
Loans to banks in the sense of common usage are useful in many cases. For example, freelancers and the self-employed often only receive loans from banks that have committed themselves to promoting the local economy in accordance with their statutes. These are largely regional banks or Good Bank and savings banks. Furthermore, after a personal consultation in the branch, loans from banks can also be successfully applied for by borrowers whose loan application was rejected on the Internet.
The reason for the seemingly more generous lending after a personal loan application is the additional information that the loan officer can access. He does not grant loans generously above average, especially since this would involve an excessive risk of default. Rather, in addition to the evidence available to him when making a loan decision, he also takes into account the impression gained in the personal consultation.
Furthermore, he can incorporate already established future additional income into the budgetary account and calculate the expenditure much more precisely than a largely automated decision-making process on the Internet. If the loan is processed through the borrower’s house bank, proper account management in the past also improves the rating of the internal credit rating. For existing customers, this is much more meaningful than the external creditworthiness of a Credit bureau request, as it makes every small irregularity recognizable.
The cost of personally requested loans
The interest rates for lending on the Internet are significantly lower than for the loan decision after a personal conversation in the bank. As an irrefutable justification, banks state that the loans agreed in the branch incur higher costs than the almost automatic online loan processing. However, only simplified cases can be handled via the simplified and automated award procedures on the Internet, while all special features make the decision on loans with banks necessary after a personal interview.
If credit customers fall outside of the standard cases, they only have the bank loan application as a regular alternative to get the desired loan. That is why the corresponding customers not only accept the higher interest rate compared to internet loans, but also feel well advised by their financial institution thanks to the personal loan discussion.