There are basically two types of loan companies that a borrower can approach. These are the high street banks and the online banks.

When surveying various loan companies, one will discover that there are only two types of lending banks. These are the high-street banks and the online banks. Each has its own advantages and, knowing such advantages, will help the borrower decide which type of bank he will approach and which type of loan he will apply for.

Here is how these two are different from each other.

The High Street Banks

These high street banks are the lending banks which lean on their names. That is, their names are already established and familiar to people. And they have already earned a trusted reputation. Many borrowers may know the terms and conditions of loans granted by these banks and, this is why, the high street banks are approached by potential borrowers who wanted to deal with trusted and proven loan companies.

The high street banks have branches all over the country. Obviously, the foremost advantage of such banks is that the borrower will be able to speak with someone from the bank. The discussion of the loan will be more personal and questions asked by the borrower will most likely be answered right there and then.

Of course, these high street banks also utilize the Internet technology. They offer their clients two options; one is in person banking and the other is online banking.

High street banks, however, has one major advantage. They charge higher interest rates. In some cases, they will ask the loan applicant to make a personal appearance and meet with a financial advisor. The purpose of such a meeting is to tackle the finances of the loan applicant.

Online Banks

Online banks need not have expensive buildings or edifices in order to conduct its business. As a result, online banks have fewer employees and fewer expenses than the high street banks. This implies that there will be fewer overheads. With fewer overheads, the online banks are able to grant loans at extremely low interest rates.

The disadvantage of these online banks is that they have no branches. The loan applicant cannot visit an office and personally bring his concerns about the loan. But these online banks have contact numbers that the client can use to contact them. These online banks also employ online banking.

Which bank to approach?

The borrower need not choose right away. He must shop around for the bank or loan company that will give him the most suitable loan. He may also want find out if the online bank has a parent company. The majority of online banks do have parent companies. And these parent companies are the high street banks. For example, the parent company of the online bank Cahoot is the Abbey National Group. The parent company of the online bank Goldfish is the Lloyds TSB Bank.

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