National Westminster Bank vs Barclays Bank Personal Loans - Essay Example

National Westminster bank Vs Barclays bank personal loans and information systems Introduction NatWest bank emerged in 1968 after the National Provincial Bank and the Westminster Bank merged, giving birth to National Westminster Bank, popularly known as NatWest Bank. NatWest became a commercial bank in the United Kingdom, and in 2000, it became part of “The Royal Bank of Scotland Group Plc”. The bank has 1600 branches and 3400 cash machines all over England and Wales. The bank has tremendously grown and it currently offers online and telephone banking services as well as mortgages to its vast customers in England Scotland and Wales (Miles, 2005:11). More so, the bank offers offshore banking services for the UK expatriates and foreigners residing in the UK. On the other hand, Barclays bank traces its origin in 1690 through a gold smith banking business in London. Later in 1736, an investor named James Barclay joined the business, which expanded tremendously to become a nationwide bank under the name Barclays and Co. Currently, the bank is a British multinational banking as well as a financial service company whose headquarters are in London, UK (Jain, 2005:96). The bank serves millions of customers with its outstanding services like saving accounts, current accounts, loans, mortgages, and much more all over the globe. This paper will evaluate the process of the two named banks’ personal loan processes and compare the two bank processes, not forgetting to outline the type of information system the banks use to process the personal loans NatWest personal loan There are two types of personal loans, which are secure and unsecured loans. Unsecured loan is that which is supported by the credit worthiness of the borrower without using collateral or property. On the other hand, the secured loan is the loan acquired after rendering property or any other collateral as security to stand in place of the loan acquired. Unsecured loan is the most common type of loan acquired by individuals of all categories. To begin with, NatWest bank offers unsecured personal loans at a rate of 8.9% APR typical and this loan is available to existing current account holders only. The other account holders like the Advantage Gold, Advantage Private, and Black Current Account holders the APR or preferential representative rates at 6.4% for loans ranging between ?7,500 and ?14,950. In addition, the applicant must be eighteen years and above and should be UK residence. In order for a borrower to estimate or work out how much loan he would like to borrow, the rates, monthly repayments and total loan costs, the bank offers personal loan calculators online. More so, the bank offers Jargon Buster to clarify confusing terminologies that are commonly associated with loans. Prior to unsecured loans, the bank also offers secured personal loan. This is a type of loan granted by banks over security of one or more asset. These assets will belong to the bank after the customer defaults on his personal loan repayments. In most cases, this loan is offered to people who offer houses or even personal vehicles as their security or collateral, which means that customers with these assets are the only individuals entitled to the loan. Unlike the unsecured loans, secured loans are more flexible in a manner that the borrower chooses on the period of repayment and can borrow as much amount of cash as they need as long as it is of the same value with the asset offered. Nevertheless, secured and unsecured personal loans fall under the same department. NatWest secured personal loan interest rates are paid based on personal circumstances where loans extending to ?14,950 have a maximum term of five years, while loans ranging from ?14,950 to ?25,000 have a maximum period of seven years. More so, home improvement loans over ?15,000, the repayment period takes up to ten years. In addition, no matter how much the amount one borrows, NatWest offers a minimum term of one year, and the borrower can repay the credit earlier in his own convenience in full or partially The process and information system used in the NatWest personal loan application Most customers acquire their personal loans over the counter. However, other customers prefer online loan processing. When applying for a personal loan online with NatWest, the customer needs a device that can access the internet, where he enters his online bank details as required then send them to the relevant address via the web (Miles, 2005:11). The process is complete and the money will be in the borrowers account the next day. However, in case of any arising issues, the bank will contact the borrower via the phone. This online system also applies to customers who are not online registered. What happens is that the customer renders his application online, and the bank will send agreement documents via the post the following day, where the customer will in turn check, sign and return the documents to the bank through the post, and if the application is successful, the money will be in the customers account after two days. Barclay’s personal loan Barclays bank offers APR representative ranging from ?7500 to 1500. Online banking also grants an instant loan. Most of the Barclays customers are online bankers and most of their loans are acquired online. However, to qualify for unsecured personal loan, the customer must have had a Barclay’s current account for over nine months and should have paid at least ?1,000 every month. The bank offers an online calculator that helps determining the rates of loans flexible for a borrower. The calculator is only available online and for a customer to access it he must have an online current account to register as an online customer (Jain, 2005:96). In addition, the banks unsecured loan rates are available online and they depend on the amount the customer is borrowing. On the other hand, secured personal loans also referred to as home loans are offered by Barclays bank, but indirectly. This means that these loans are offered by freedom finance that has an agreement with Barclays to arrange for home loans for its customers. For a borrower to qualify for this loan, he must be eighteen years and above, should be a UK homeowner with a minimum income of ? 8000 per year. Additionally, the bank offers unsecured loans to customers who are applying for ?3,000 to ?250,000 and may range between 1- 25 years. The process and information system used in Barclays bank personal loan application The process of loan application in Barclays bank is not far much different from that of NatWest nevertheless, in Barclays bank; a customer has to have a current account to qualify for online banking registration. Once registered, the customer automatically gets a mobile PIN sentry reader, a system that represents the card reader. The PIN sentry card reader helps the customer monitor his current account and loan details via the mobile. Prior to acquiring a PIN sentry, the customers get their loan instantly as long as the loan has undergone approval. Since online registration is compulsory, the signing takes place through the internet. In cases where the loans fail approval, the customer is notified either online or through the phone. Comparison Barclays and NatWest banks are similar in the fact that they have existed for centuries and have their headquarters in London UK. More so, the two banks offer the traditional unsecure loans unlike other banks that restrict on the issue (Phillips, 2005:266). Prior to the few similarities, they differ in various ways. For instance, NatWest has its detailed rates on any type of personal loan a customer needs, while Barclays personal loan rates are not openly available to the public because they are only available to registered online users. In addition, the terms of personal loan processing are flexible in NatWest compared to the Barclays who seem strict ion terms and conditions. This is the case because a Barclay’s customer cannot process any personal loan unless he is a current account holder, a platform that grants him online registration. NatWest is different because they offer personal loans to vast account holders both online registered or not. The other difference that the Barclays bank restricts on customers borrowing personal loans is that the customers must have deposited ? 8000 annually, while NatWest values the progress of the customers’ accounts without fixing an amount. Conclusion Barclays and NatWest banks have come a long way and have managed to beat all manner of crisis and wages. The two banks are among the few banks that transformed banking systems globally. In addition, both banks embraced advance information systems in the late 70s and progressed along with technology, which means that their information system should be above the game based on their experience (Lucas, 2002:164). The information system through online and banking systems are still below average because there have been reported cases on online frauds and inconveniences associated with poor online services management (Jain, 2005:96). Bibliography Jain, A. Cyber crime: issues threats and management. New Delhi, Isha Books. 2005. Print. Lucas, H. C. Strategies for electronic commerce and the Internet. Cambridge, Mass. [u.a.], MIT Press. 2002. Print. Miles, P. GCSE business and communications systems. Teacher support pack Teacher support pack. Cheltenham, Nelson Thornes.2005. Print Phillips, R. L. Pricing and revenue optimization. Stanford, Calif, Stanford Business Books.2005. Print. Read More