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Non Bank Lenders Australia

Obtaining loans from traditional banks may often be time-consuming due to paperwork, administrative steps, and document verification. This may delay loan approval, which could make it difficult for borrowers seeking quick loans. But some non-bank lenders provide fast loans. In this guide, we’ll cover the key information about non-bank lenders to help you find a suitable lender for your requirements.

Disclaimer: Certain ideas and products presented in this article may not be offered 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.

Who are Non-Bank Lenders?

Non-bank lenders are financial providers that typically give loans to borrowers without accepting customer deposits. These financial institutions generally aren’t supervised by the Australian Prudential Regulation Authority (APRA), even if they hold an Australian Credit Licence (ACL). Instead, they may be directly regulated by the Australian Securities and Investments Commission (ASIC).

You may wonder: How do non-bank lenders get money for loans if they don’t accept customer deposits?

Typically, non-bank lenders source money for loans themselves. In some cases, they may use securitisation, a process where they pool and repackage loan portfolios into interest-bearing securities like investment funds. They may then sell the securities to investors to obtain funds for the loans.

How Safe are Non-Bank Lenders?

Taking loans from non-bank lenders might generally be considered safe, provided the money lender holds a valid credit licence under the National Credit Act and complies with ASIC regulations.

However, because non-bank lenders usually lie outside the prudential banking regulation (i.e., they are not supervised by APRA and cannot take deposits), they may carry different risks compared with traditional banks.

What Types of Loans do Non-Bank Lenders Offer?

Due to varied customer demands, many non-bank lenders may offer different types of loans with a diverse range of amounts:

Personal loans

Often used to meet personal expenses such as debt consolidation and home renovations.

Mortgage loans

Mostly for financing the purchase of real estate, where the property itself serves as collateral.

Home loans

Often borrowed to buy or build houses, using the same or any other property as collateral.

Fund loans

Generally provided to borrowers from the lender’s fund for business or personal expenses.

What are the Pros and Cons of Non-Bank Lenders?

Although the non-bank lending market is seeing steady growth in Australia, it has potential advantages and disadvantages. Being aware of these may help you make informed decisions when choosing loans.

Pros

Fast approvals: Non-bank lenders may have streamlined loan approval processes with flexible internal rules and advanced automation. This might provide quicker access to the loan amount, which might be beneficial for some borrowers.

Flexible lending: Non-bank lenders generally follow ASIC guidelines and may have fewer regulatory constraints, lenient income assessments, and credit requirements. This might mean non-bank lenders consider applications from people with poor credit history or businesses.

Tailored services: Non-bank lenders usually analyse borrowers’ intentions, situations, and financial conditions before issuing loans, potentially offering customised solutions.

Cons

No deposits: Non-bank lenders usually do not offer savings or transaction accounts. You might need to create and manage a separate account with a regular bank, even if you already have accounts with non-bank lenders.

What Happens if Non-Bank Lenders Stop Operation?

When non-bank lenders go bust, they may sell their loan portfolio and other assets to another company. As this is typically an internal process, the terms and conditions of the loan may remain the same, and you may continue making monthly repayments.

What are the Risks Tied to Using Non-Bank Lenders?

When compared to the traditional banking system, engaging in non-bank lending may carry some risks. As non-bank lenders aren’t usually regulated by APRA, they may provide fewer external consumer protections. Some of them may also charge additional fees that are not immediately obvious. Typically, traditional banks may offer lower rates than non-bank lenders. However, you might reduce these risks by carefully reviewing the terms, conditions, and interest rates of any loan.

Want to Borrow from Non-Bank Lenders in Australia?

If non-bank lending seems like the right option for you, finding suitable non-bank lenders might be challenging. According to data from the Reserve Bank of Australia (RBA), non-bank lenders account for a small percentage of the total financial system, which could make them hard to locate.

So if you’re exploring loans, Monzi may help by matching you with non-bank lenders based on the information you provide. We’re easy-to-use and reliable, and may connect you with suitable lenders that could meet your needs.

Top FAQs About Non-Bank Lenders

People use non-bank lenders when they want an alternative to a bank. Sometimes, for different credit policies, product features, or faster/less traditional assessment (depending on the lender). They can be an option when a bank’s criteria don’t fit your situation.

Yes. ASIC regulates many consumer lenders and must follow Australia’s consumer credit rules, but they generally don’t have the same prudential oversight as banks (ADIs) regulated by APRA.

Non-bank mortgage lenders often fund loans through securitisation (e.g., RMBS) and similar wholesale funding structures rather than customer deposits. The RBA has noted that RMBS is a major funding source for Australian non-bank mortgage lenders.

Potentially, but it’s usually harder: lenders focus on whether repayments are affordable and whether there’s a realistic “exit strategy” (how the loan will be repaid over time).

Australia’s Financial Claims Scheme covers deposits up to $250,000 per account holder per ADI if an ADI fails; amounts above that cap aren’t covered under the scheme. Some people spread funds across ADIs to manage this.

It varies by lender, but some policies focus on the borrower’s age at the end of the loan term, often around ~80, plus income and exit strategy. It’s lender-specific, so you usually have to check the policy for the product you’re considering.

There are many, but examples often mentioned in the market include Firstmac (and loans.com.au) and Resimac (and homeloans.com.au), among others. The exact mix changes over time, so lists tend to be “examples,” not a complete register.

In Australia, “traditional lenders” usually means banks, building societies, and credit unions, the institutions that are authorised deposit-taking institutions (ADIs). APRA maintains the register of ADIs.

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Costs

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

Frequently Asked Questions

Quick cash loans are personal loans that make their way into your account super fast! By speeding up the application process and automating the tedious bits, we can start looking for lenders for you faster. You can typically borrow quick cash loans between $300 and $15,000.

Small loans are just like fast cash loans, but...small! Nothing too complicated. Typically, small loans are between $300 to $2,000 and are usually, unsecured loans.

We cannot guarantee that the lender we find won’t conduct a credit check on loans applications. However, we find lenders that may not just look at your credit score, they sometimes dig deeper. They can take a look at your current relationship with money and other factors to see if you’re suitable for quick loans.

Secured personal loans are loans that require equity as security, such as a car, motorbike, boat or caravan. Most secured loans are between $2,100 to $15,000.