Private lenders become more attractive as Australia’s bank oligopoly faces tough regulatory measures to drive competition.

The dominance of the big banksĀ in the Australian mortgage market has created recent cause for concern in the Australian political paradigm. Greens MP for Melbourne Adam Bandt has made it his mission to see increased competition between the big four Australian banks. His recently introduced parliamentary bill is just an example of recent attempts to make it easier for customers to switch accounts over to a bank which drives a better deal for consumers. What may not be clear to consumers is that private lenders have and always will offer a competitive deal on mortgages and other home loan products in one key area; flexibility.

Bandt’s bill, like many of the other reforms tabled for the banking sector in the coming months, operates on the statistical assumption that consumers are less likely to shop around for better deals on financial or lending products when they feel administratively or financially locked into one institution. With the potential abolition of the administrative hassles associated with sourcing financial products from lenders other than the banks, consumers should feel more comfortable looking to the private mortgage market for their financial solutions.

What makes private lenders an attractive alternative to traditional bank lenders?

Consumer orientated private lending solutions

Unlike the big four banks, non-bank lenders often operate on a private finance model with a proven system of obtaining fast and effective financial solutions through a network of private lenders and other non-bank lenders. Many clients are seeking to refinance their home loans because of increases in their interest rate or just because of general frustration with the banks.

Competitive rates on home loans

Private lenders are investing for a number of different reasons. The private mortgage market is extremely competitive resulting in fantastic rates from private or non-bank lenders.

Flexible lending options

Bank finance products have extremely tight restrictions and lending criteria. Finance from private lenders on the other hand can be extremely flexible. If you have bad credit history for example, you may be entirely ineligible for a bank loan. This doesn’t disqualify you from seeking finance for a private lender.

Speed and Ease of process

Private lenders can act much faster than the big four banks. Often a private finance broker will have an online application process with a quick turnaround. Some can even provide a letter of conditional approval in a matter of hours.

What to look out for in private lending arrangements

Dealing with individual private lenders can also be an administrative headache if you don’t have an experienced team to find you the best deal for your unique financial situation. In light of this reality, consumers need to ensure that they find someone who has experience, market knowledge and a good relationship with specialist solicitors who produce the agreements governing the private loan.

An experienced team or broker that knows the market well and has systems setup to offer you a quick and easy turnaround will be the best choice for dealing with the private finance market.