This topic has been an ongoing debate since the last century. It’s been so long that people and society have pinched a label on private lenders and bank loans. Before you began to stigmatise any of them, you have to truly understand the nature of businesses and how they function.

Traditional banks are not always the better option when it comes to money lending. Private lenders like Finsource Credit actually offer some extra advantages that even the biggest banks fail to compete with.

What are the differences? Which is better? How do I apply for it? These are a few of the common questions that people have in mind it comes to money lending.

In this article, all your questions will be answered. We have also done the research for you to save your time and ease your understanding.

Remember, you have to carefully weigh the advantages and disadvantages of both before jumping onto the ship.

What are Bank Loans?

Bank loans are formed by funds of depositors. Bank loans gain profit from charging borrowers with a slightly higher interest rate while paying depositors with a relatively lower interest rate.

When required, banks may seek help and borrow funds from the federal government.

What are Private lenders?

Just like Finsource Credit, private lenders are usually funded by a group of investors and business owners. If the amount is much larger than their capabilities, private lenders will sometimes take a loan from banks to lend money to the ultimate borrower.

Here is a summary of the pros and cons for both bank loans and private lenders.

Private lenders


  • More convenient and offers competitive rates.
  • Lower setup costs.
  • More flexible and less regulated.
  • Customisable according to your personal needs.
  • Provide a more personal and greater customer service.
  • The loan approval rate is much quicker.
  • Simpler and easier approval process.


  • You may need to do some research before borrowing from private lenders.
  • Tend to be more vulnerable to the everchanging economic conditions.
  • Slightly higher interest rates.

Bank loans


  • Lower interest rates.
  • Higher stability even when an economic crisis arises.


  • Extremely rigid due to being restricted by government regulations.
  • Strict loan options and rely heavily on your credit score.
  • Loan approval process could take forever.

What are the differences between private lenders and bank loans?

Private lenders do not possess an official banking license. Don’t get the wrong idea here, private lenders like Finsource Credit still hold a legal license issued by the federal government. It is just different from the one being given to the banks.

Contrary to popular beliefs, private lenders actually have to abide by the same rules and regulations as the banks. Therefore, there is no need to worry if you decide to take a loan from private lenders because you will still be well protected by the law.

Why should you go for a private lender instead of a bank?

Private lenders may have the edge as they are always more flexible with their lending terms when compared to the banks. Banks have a long list of their management rules to follow, hence making their loan approval process more rigid. Furthermore, the bank loan application process often involves mountains of paperwork and dozens of forms to be signed by hundreds of different departments. You could be waiting for weeks and the next thing you know, you were told that your loan application is rejected.

Borrowers often got rejected by the banks just purely due to their unhealthy credit scores. They are more likely to borrow money successfully from private lenders in their second attempt. This is because private lenders take into consideration of the borrower’s background and personal challenges.

Private lenders like Finsource Credit understand that a low credit score does not mean that the person is a bad candidate. Life is always unpredictable. Anything can happen that causes a person’s credit score to drop. It can be due to a bad car accident or a hefty medical bill. All these are simply beyond the control of any individual and they should not affect their credibility.

Some of you may just go for bank loans without thinking twice due to the difference in interest rate. But if you really do your maths correctly, it actually does not differ as much as you thought. The difference between the interest rate of 10.8% and 8.5% is really quite minute given the grand scheme of growing your business. In five years, your business would have outgrown these interest rates.

Besides, applying for loans from a private lender is better than staying stagnant and not growing your business at all, or in the worst-case scenario, losing your business because of bank loan rejection.

How you can borrow up to RM10 million without hassle

The leading private lenders in the industry such as Finsource Credit can offer up to 10 million to you. This is such a gigantic number that even the biggest banks in Malaysia may turn you away upon hearing this number.

Other than that, Finsource Credit also provides an extra-long financing tenure which supports you up to 8 years. 8 years! That is like 96 months and 2920 days.

Besides that, the interest rate is only at 10.8% per annum. If divided by 12 months, it is actually less than 1% per month. Please tell us, where can you get a better deal than this?

The best part is, the loan approval time is only 10 days! Yes, you heard it. 10 days is all you need.

Finsource Credit offers three different types of loans that cater to your needs, from clean loans, property secured loans & 2 in 1 financing.

Our financial experts are always ready to answer your inquiries 24 hours a day and provide professional credit counselling if you ever need one.

Contact us today and get all your financing needs answered. We guarantee you a satisfied loaning experience.

contact us: 03-2712 4333


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