I had a reader in Australia contact me about how he'd go about getting a mortgage there. Typically I don't deal with countries outside the United States, because that's my specialty. Still, I like a good challenge, so I decided to give it shot.
One of the first things I came across was the term, "non-bank lender." I thought that was an odd-term. I don't typically see things described in the negative in that sense. For example, I don't consider myself a non-book author, but I guess it would technically be correct.
After I got over that oddity, I thought that it may be how Australia is describing peer-to-peer lending companies. Again, while it may be technically true, "non-bank lenders" are typically credit unions in the United States.
It turns out that it is is very important to understand the difference between non-bank lenders and a financial lender that is a bank. Non-bank lenders often have better rates and fees and are able to give more personalized service. However, they may have limited lending products and services vs. bank lenders. As long as you don't need a bank lender product, you might as well use a non-bank lender to capitalize on the terms and the service right?
Well the first question is whether it is safe to deal with non-bank lender. If it's not safe, then saving a few extra dollars isn't really a step in the right direction. I did a little research and found that the Consumer Credit Code governs all credit transactions in Australia so if anything should go wrong you should be covered.
I dug in a little deeper to see if I could help the reader a little more. I typically steer clear from directing people to specific companies, especially when I don't know them well. I did see that State Custodians have been awarded Non-Bank Lender of the year for each of the last 4 years. They must be doing something right.