Non Bank Lenders – Escaping The Traditional

If you are looking to take a loan soon, you may be yet to consider the possibility of non-bank lenders. You don’t have to engage with one of the big banks to get your loan funded. Whether you are seeking cash loans to buy a home, or fast loans to cover more minor expenses, you have multiple lender options available to you.

But why opt for non-bank lenders? Depending on your financial situation, there are several reasons you may want to consider searching away from a mainstream bank lender. Whether it’s the state of your credit, the customer service, or the flexibility, there are several features non-bank lenders may be able to offer you.

Please note that specific ideas and products presented in this article may not be on offer by Monzi or the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What are non-bank lenders?

In the simplest sense, a non-bank lender is a lender that is separate from a financial institution such as a bank or credit union. Also known as private lenders, non-bank lenders have their source of funds that they can offer you for your loan. They typically operate similarly to a regular bank lender. However, they may be able to provide you with far more flexibility.

There are pros and cons to non-bank lenders and bank lenders. However, knowing how a non-bank lender can benefit you, may help you make informed decisions about your borrowing. In the past, there has been some stigma surrounding the motives of non-bank lenders. More recently, however, non-bank lenders have grown to be seen as legitimate alternatives to bank lenders. Thereby resulting in a more competitive industry that is to your advantage.

Why might you turn to non-bank lenders?

There are multiple reasons you may seek out non-bank lenders. The most popular, however, is the possibility of credit lenience or no credit check loans. Traditionally, banks can be pretty uptight about who they will lend to. This is understandable considering the ‘esteemed financial institution’ connotation that is often attached to their brand. However, this then means that much of the population may struggle to obtain loan approval. This is where borrowers are finding hope in non-bank lenders.

Most non-bank lenders can offer their borrowers:

  • Flexibility: Lenience surrounding the state of their credit and the terms of their loans.
  • Personability: Borrowers may receive better customer service outside of financial institutions.
  • Simplicity: Depending on the loan, it may be easier to complete the loan process using non-bank lenders.

These are not guaranteed, however, as each private lender operates differently. Although generally, the running theme across all non-bank lenders is that you are likely to have more flexibility throughout their process. The Monzi lender-finder works with a network of non-bank lenders to try and match you to someone who may be able to help with your loan. You may find that these lenders are more willing to hear you out and consider your life circumstances before deciding on the outcome of your loan.

How do non-bank lenders work?

Monzi cannot speak on behalf of all non-bank lenders. Essentially, however, a private lender may operate by evaluating all aspects of your application and lifestyle. This means that rather than basing whether the application moves forward on your credit report, your credit becomes just one of many factors in the decision-making process.

For example, in the Monzi application process, you are asked to provide three months worth of bank statements showing a regular income. If your credit score isn’t looking so flash, your lender may also choose to look at your income and expenses. If they look reasonable, they may also evaluate how steady your job is and the scale of any existing debt you may already have. In some instances, you may also be able to explain your situation. For example, perhaps you made some accidental mistakes with your money management in the past and have been correcting them ever since.

The lenders in the Monzi network understand that life happens. Not everyone will have a perfect credit score, which shouldn’t be the end of the world. Beyond this, however, non-bank lenders follow the traditional loan concepts of having a term, an interest rate and regular repayments.

Are non-bank lenders safe?

There is a notion that banks are the safer of the two options, and whilst this may be the case in certain circumstances, the law regulates both types of lending. In some ways, the non-bank lending industry can be self-regulatory by rewarding its lenders work. Meaning this is a positive aspect. However, as with all things financial, some ‘lenders’ in circulation may look to harm rather than help.

There are two ways you can ensure that the private lender you choose is trustworthy and law-abiding:

  1. Conduct your research: With enough searching into your options, reading reviews and speaking with businesses, you should be able to find a private lender independently.
  2. Use Monzi’s lender-finder: All the lenders in the Monzi network are trustworthy and available to try and help you. Monzi can remove the hassle of doing the research yourself. As with all things financial, there are dodgy people in circulation. Monzi may put you at ease by offering legitimate lender options to help you.

Please note that if you choose to engage with Monzi’s lender-finder, you aren’t guaranteed approval regardless of the flexible criteria. It is a legal requirement that lenders cannot lend to potential borrowers who cannot repay. Denial is in your best interest as it means that you won’t run the risk of putting yourself in debt.

Bank vs non-bank lenders

All financial decisions come with their pros and cons, and you should make your decision around your situation. However, having said this, there are several advantages and disadvantages to each option. Here are some things to consider if you have an upcoming decision to make.

Bank lending

The most significant advantage of bank loans is perhaps the stability. If there is a crisis of some description, your loan may be safer if you take it with a bank. This isn’t super common, although if the outcomes of the pandemic have worried you, you may lean towards bank lending. It may also be easier to find a bank lender for a mortgage loan, given the size of these loans. On the other hand, however, bank lenders do not offer a lot of flexibility. If you don’t have the best credit score, bank lenders may not give you the time of day.

Non-bank lending

Non-bank lenders have a reputation for flexibility. If your credit score looks under the weather, you may have heightened approval chances with a private lender than a financial institution lender. You may also encounter better customer service with a private lender. This is because you may be less likely to get lost in the system. So, if you are sick of bank service, maybe non-bank lenders could provide a pleasant change. However, note that you may be at risk in a crisis, and you need to ensure you do your research and that your lender is trustworthy. Monzi can help with this.

Are private loans from non-bank lenders?

Yes. Private loans are from private lenders – lenders that don’t belong to a financial institution. Most people turn to private loans when they cannot qualify with one of the big banks or they are sick of the experience of interacting with financial institutions.

If you want to make it easier for yourself to find a private lender, Monzi may help. You can use the Monzi lender-finder to potentially match with a lender in as little as 60 minutes. The Monzi service is free to use and simple to get started with. If you have further questions about our services, feel free to email the team at

Best non-bank lenders

It’s not for Monzi to say who the best non-bank lenders are. We can, however, give you some methods for finding a lender that may be right for you. Consider:

  • Using a comparison tool
  • Asking friends if they’ve had any positive experiences with any lenders.
  • Using the Monzi lender finder.

Once you have decided whether you would like to opt for either a private or bank lender, based on your needs, you can go about choosing a company. If you would like to do so independently, you can start by asking friends and family where they had good experiences. From there, try comparison tools. These tools compare the popular options on the market side by side, so you get an idea of the features of each loan. Once you narrow it down, you can reach out to your choice(s) and seek further information. If you are looking for personal loans and want a helping hand, however, Monzi may be able to quickly and easily find a lender to work with you.

Is it wise to look for non-bank mortgage lenders?

This depends on both your situation and your motivations. A home loan is a big commitment, and even a private lender may want to see appropriate credit in some cases when funding such a large loan. Meaning, if your motivation is that you don’t think you’ll receive approval at a regular bank, you may want to evaluate whether a mortgage is a good idea.

However, several large non-bank lenders can comfortably fund a mortgage if you would like a private loan. Aside from bad credit, some situations may prompt you to take a non-bank mortgage loan. They can also be suitable for first time home buyers, the self-employed, and investors. Don’t waste your time with bank loans if you think it may be less effort to get non-bank loans approval.

Is it wise to take non-bank personal loans?

It may potentially be more common for people to seek personal loans from non-bank lenders than a traditional bank loan. This doesn’t mean banks don’t offer these types of loans. However, they may not be as easy to obtain. Generally, people take personal loans because you can use them for almost anything and they can be quick.

If your situation demands a fast loan, it may be wise in some instances to take a private personal loan. You can potentially receive same-day cash with this method. However, ensure you first consider your position. Taking a rushed loan in a troubling situation has the potential only to worsen the situation. The government’s MoneySmart site has an excellent page on urgent help with money. If you feel the heat with your expenses, start here to find loan alternatives that may be a better decision.

Non-bank lending

Can you get non-bank business loans?

If you take a private personal loan, you can use it for just about anything you like. While some non-bank lenders offer specific business loans, you can go to a private lender offering personal loans for the same purpose. This is great if you are a new company struggling to get funding due to your present risks.

However, you can do this with any sort of loan. Personal loans are versatile, and if you wish, you can use them as car loans, a travel loan, or a bond loan. The possibilities are endless. However, ensure you aren’t just taking a loan for the sake of it. In some situations, it may be better to save and avoid putting yourself into debt.

Non-bank lenders with no credit checks

In some cases, you may even be able to find non-bank lenders that won’t conduct a credit check at all. This generally depends on a few factors, particularly your lender, the loan type, and the amount you seek.

Some of the lenders in the Monzi network may be able to offer you a loan exempt from a credit check. This means that they will conduct their application on your income, expenses, debts, and job security. There may also be a couple of other factors that your lender may look at. If your lender does require a credit check, as that is their terms of operations, this may not be the end of your application. If the other areas of your life are in order, but your credit report has some marks on it, your lender can potentially overlook this.

However, if you are desperate to avoid a credit check and your lender requires one, you can apply to be rematched. Please note that Monzi cannot guarantee that you will match with a new lender the second time.

Where do non-bank lenders get their money?

It’s hard to say precisely where each private lender gets their money. However, the general concept is that non-bank lenders have their own wholesale funds source, which they then lend to you with an added margin to help them make a profit. This added margin usually comes in the form of interest and certain additional fees. For this reason, interest rates may be slightly higher in order to cover your lender if you fail to make your repayments.

Is it easier to get a loan from non-bank lenders?

Yes, generally, it can be easier to obtain a loan from non-bank lenders. This is because these lenders have a reputation for understanding circumstances and listening to their customers. And it isn’t just for credit scores, either. There are people from all walks of life who can struggle to get a bank loan for various reasons. One myth about non-bank lenders is that they only loan to people with bad credit histories. While they do this, they also cater to a much broader demographic.

One typical example is that the self-employed can struggle to receive loan approval due to a lack of evidence of cash flow. This doesn’t mean it’s not there; instead, it means the business set-up has a hard time showing on paper that it can afford a loan. Private lenders can help with this where banks cannot.

Are non-bank lenders cheaper?

It’s hard to say whether or not non-bank loans are the cheaper option. This is because the total value of a loan calculates on several factors, regardless of the provider. Private loans aren’t necessarily expensive, however. Interest rates do depend on the market as well as the provider.

If you are looking to keep your loan as cheap as possible, you will want to avoid companies with high additional fees. These could include application fees or any annual or maintenance fees that may get added to your loan. An excellent way to compare these yourself is by going to one of those comparison tools. Or you can use Monzi. For a rough estimate of what you might expect to pay, see our homepage. Please note that each of the lenders Monzi works with operates differently. The information listed on our homepage is merely a guide.

When should you use a non-bank lender?

There are multiple motivations for using non-bank lenders. These could include:

  • Credit score: Your credit score is sitting below the ‘good’ range, and you won’t qualify with a traditional bank lender.
  • Alternate lifestyle: You need someone to take a chance on you as you don’t align with bank criteria. Perhaps you’re a first home buyer, self-employed, or a single parent.
  • Customer service: You feel you will get a more personalised experience through non-bank lenders.

Naturally, your motivation will depend either on past experiences or your current position. If you don’t fit any of the above categories, you may be able to secure a traditional bank loan. However, this does not mean you have to. Even if you simply just want to try something different, you are welcome to give non-bank lenders a shot.

Collateral and deposits

Monzi cannot speak on the operations of all non-bank lenders. However, you are likely to encounter the need for collateral. Or, if you are seeking non-bank home loans, potentially deposits.

However, when it comes to Monzi lenders, you can expect that you will most likely need to secure any loan over $2,000. Securing a loan means providing collateral – an asset of yours – to cover yourself and your lender if you fail to make your repayments. Generally speaking, this collateral is typically your car, or in some cases, all or part of your home. Showing that you can secure your loan may help your application if you have bad credit.

How do you look better on your private loan application?

As mentioned above, securing your loan is potentially one way to improve your chances of being approved for a loan with non-bank lenders. However, there may be other things that you can do.

Naturally, non-bank lenders will be motivated if they can see you work a stable job and have room in your income to account for a loan. If you don’t require quick loans now, working on saving and making room in your budget for a loan may help your cause. Alternatively, apply to borrow within your means. One way to do this well is by using a personal loan repayment calculator to work out what you can repay. Then, you can avoid applying for a $10,000 loan when your capacity is only $5,000.

Beyond this, you also have the option of doing some credit repair. However, this is not guaranteed results and may not generate any quick changes.

Are private lenders riskier?

In this day and age, not necessarily. Unless we encounter frequent economic or financial crises in the future, which would just be bad luck, it’s unlikely that non-bank lenders are super risky.

Both lending options are quite thoroughly regulated, even though bank lending is regulated slightly differently and more strictly. You simply need to be smart with your application and the lender you choose. Stay away from any companies that don’t sit right with you. If you want some help with your application and finding a lender, why not try the Monzi lender-finder? We’ll do our best to find you a lender who may be able to help you. Without the hassle of getting mixed up in the research phase and stumped by loan jargon.

When should you avoid non-bank lenders?

There aren’t many situations where it may be wise for you to avoid a non-bank lender. One that particularly comes to mind, however, is if you are debt cycle averse. There are two reasons to avoid taking a loan if you know you might not be able to repay it.

The first is that if you do apply for a loan with non-bank lenders or any lenders, too frequently this will show on your credit report and endanger your credit score. Which is something you want to avoid if you are trying to improve your credit. The second is that if you are somehow approved, you could fall into a debt cycle. This shouldn’t happen if your lender is responsible and law-abiding. However, borrowing for the sake of getting access to credit is not intelligent. If you are in this position, consider seeking help to prevent putting yourself in hot water.

Non-bank lenders for investing

Investing seems to have grown in popularity; whether buying an investment property or cryptocurrency investing, it’s common to take an investment loan. But can you obtain them through non-bank lenders? Yes. Alternatively, you can take personal loans in the place of margin loans or investment home loans.

However, there are always risk associated with borrowing to invest, given the opportunity to lose money. Ensure you are knowledgeable about investing. If you aren’t, consider starting small with your aspirations and working upwards. An investment broker may help you navigate the world of investing if you aren’t sure where to start.

How can Monzi help?

Monzi’s goal is to take the hassle out of finding non-bank lenders. If you are ready to apply, there are not many criteria you will need to meet. Aside from a valid email and phone number and three months of bank statements, you won’t need anything else. Easy as!

Just scroll up to our loan slider or click the purple ‘apply now’ button to get started. Once you complete the application, the rest is over to us. We will do our best to try and match you with a lender in as little as 60 minutes. If we are successful, your new lender will be in contact. It’s so simple. You might complete half the loan process in only a few hours.

The traditional bank loan may not be as easy to apply for, so keep us in mind when making your decision.

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440.

Disclaimer: Under the current legislation, all Small Amount Credit Contract loan providers don’t charge an annual interest rate. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The comparison rate on loans between $300 and $2000 could be up to 199.43%. The minimum loan term is 16 days and maximum loan term is 12 months. Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan.

Loan amount

$2,100 - $4,600


13 months (minimum)

24 months (maximum)


47.8% Annual Percentage Rate (APR)

65.85% Comparison Rate p.a.


Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88.

The maximum interest rate for a Medium Amount Credit Contract is 47.8%. Comparison Rate 65.85% p.a. The maximum loan term is 24 months. Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.

Loan amount

$5,000 - $15,000


13 months (minimum)

24 months (maximum)


17% Annual Percentage Rate (APR)

36% Comparison Rate p.a.


Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489.

The starting interest rate for a Personal Loan is 17%. Comparison Rate 36% p.a. The maximum loan term is 24 months. Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.