Glossary
Non-bank lender
A non-bank lender provides loans but is not an authorised deposit-taking institution, so it funds its lending from sources such as wholesale markets, securitisation or investor funds rather than customer deposits.
An example
A self-employed borrower whose income is hard to verify applies to a non-bank lender that uses different assessment criteria from the major banks.
Why it matters
Non-bank lenders can offer different products and policies. Their funding sources and regulation differ from banks, so it is sensible to check licensing and complaint scheme membership.
Points to check
Non-bank lenders vary widely in size, funding and products. Ask how the lender is funded, whether it holds an Australian Credit Licence where relevant and whether it is an AFCA member. Check how it handles extensions, hardship and complaints. Some non-bank lenders offer products similar to banks; others focus on short-term or specialist lending. Read the loan documents carefully, because terms can differ significantly from bank loans, and search ASIC's professional registers to confirm the lender's details before paying any fee.