What is an in house loan? All you need to know

Sometimes, raising the money to buy or build your dream house may seem daunting but with an In-house loan, you can be so sure to get your dream house soon. You may ask, what is an in-house loan and how does it work? Alright, in the lines to come, I’ll show you.

The process of money lending has gone through several stages of democratization and consequently, big banks used to have a monopoly on selling quality credit products.

Luckily for all of us, technology has helped us find alternative lending options. In-house loans and financing is one of those options.

This option helps a venture offer more payment flexibility and helps them score more business even when clients don’t have all the money to pay upfront.

Interestingly, this practice helps to keep clients by helping them get what they need on conditions that work for them, without having to deal with the middleman’s rates and fees.

Here in this article, you’ll learn more about what an In-house loan is. Just keep reading.

Meanwhile, here’s the table of content below for an overview of what to expect in this article.

What is an In-house loan?

In-house financing is a type of loan offered by a business directly to a customer, allowing them to purchase goods and services offered by the business.

Usually, this kind of financing eliminates the need to secure a loan through a financial institution.

A typical analogy of how In-house loans work is this: If I want to purchase the latest Ford Edge which costs about $38,100, and I don’t have the complete money, what I’ll simply do is to approach Ford Automobile Company for an In-house loan.

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The corporation will look through my application to see if I’m creditworthy. Being creditworthy means whether I’m able to pay back the money. They’d like to know if I have a steady flow of income to pay back the money.

If I satisfy all that they require of me then, I’ll be given the amount of money I want so I can really purchase their product.

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Which is better between in house or bank financing?

Which is better between taking a loan from the bank and taking an In house loan? Oh, well, both are very good ideas to take if you are looking for a loan.

So the choice you make largely depends on what your repayment plan is. If you don’t wish to repay the money soon, then you’d need to take a bank loan. Usually, In-house loans have shorter repayment plans.

So the main difference between bank financing and in-house financing is that bank loans have longer payment terms while In-house is shorter.

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You can choose to pay out the bank loan amount in as short as five years, or as long as 20 years while in-house financing allows you to pay at a maximum duration of five years.

Is In-house financing a good idea?

Yes, Like you want to guess, It is absolutely a good idea to take an in-house loan. You will find out why I say so. Just ensure to follow me very closely.

Pros and Cons of In-house Loans

Here in this section, we’ll look at some of the advantages and disadvantages of taking an In-house loan. Just follow through.

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Below are some of the advantages of taking in-house financing.

  • In-house loans require little paperwork 
  • There are usually Higher chances of loan approval 
  • It is very convenient to access


  • They have high-interest rates
  • They have a shorter loan settlement period

Bottom Line

You could consider getting this kind of loan if you are going to get a property or product from a company or organization.

For the most part, you take in-house loans if you want to acquire stuff like automobiles and houses.

Interestingly, the emergence of technology firms and mobile apps, point-of-sale financing makes the financing process immediate and easier.

Summarily, it won’t be out of place to take this loan on the next big asset you want to acquire; a car or a house.


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