Look Locally for Your Loans

Reasons to choose a smaller financial institution to come through for you and your money

10/17/2013 8:55:34 AM

Life is constantly throwing surprises in your path that require extra funds. Whether it’s paying for a child’s wedding, paying for college or making repairs on your home, personal loans are sometimes necessary. But if you’re considering taking out a personal loan, you should strongly weigh whom or where you’re getting it from. Smaller, community financial institutions are a better, more reliable source for a variety of reasons.
According to Paul Bomberger of Bankrate.com, “Rapid changes in retail banking have left many people wondering whether to choose big regional and national banks, or smaller local institutions. Personal finance experts say it comes down to how you want to access money and the type of relationship you want with a bank.” Bomberger goes on to suggest asking certain questions before choosing which financial institution to go with: 
  • What kind of relationship do you want with your financial institution? If you want a more personal relationship with your financial institution, you should look at a smaller, local one. When the people handling your money know you and your banking habits, they are more likely to trust you with a larger loan amount. 
  • Is your money safe?Whether you’re taking out a loan or making deposits into an account, you want to know that your funds are secure. Check to confirm that the financial institution you’re looking into is insured. 
  • Does the institution offer the most current technology? Bomberger says, “From the customer standpoint, big and small banks are almost equal in the technology used to enable you to bank online efficiently.” 
Peter Kenney of The Thrifty Scot says, “There are several factors that should be considered when it comes to a comparison between these two different types of institutions. None of them is more important than what kind of service you as the potential customer prefer.” Kenney goes on to mention that smaller banks are better at offering genuine personal attention to customers and more flexibility in cases of overdrawn accounts, mistakes, etc.
“Community [financial institutions] have always had their door open for consumer loans,” says Michael Menzies, chairman of the Independent Community Bankers of America and president and CEO of Easton Bank & Trust, a community bank in Maryland. Menzies explains that smaller community institutions are more likely to mold the terms of each loan depending on the borrower’s credit, reputation with the financial institution, income and purpose of the loan.

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