Individuals are not limited to securing financial products from the institution where they currently maintain accounts. One has the option to apply and potentially be approved for credit from a lending institution separate from their existing banking relationship. For example, a consumer with a checking account at Bank A may still apply for a credit line with Bank B, Bank C, or any other credit-issuing entity.
The ability to obtain credit from various sources fosters competition within the financial industry, potentially leading to more favorable terms and conditions for the consumer. Diversifying credit relationships can also mitigate risk, as reliance on a single financial institution may pose a disadvantage if that institution alters its lending practices. Historically, the separation of banking services has been a cornerstone of modern financial systems, allowing for specialized lending and tailored credit products.
