If you have decided to use loan services, you need to check the information to know whether you can afford getting a loan and how to pay it back.
The List of FAQ for You to Check:
Have a look at the answers to the most common questions about lending money:
1. What Is Online Loan?
Online loan is the ability to quickly get a loan and get money in a short period of time. However, one should not hope that it will be possible to get a loan as quickly as with extremely tight microcredit terms. An online loan and a microcredit are different things, because an online loan implies getting a large loan, even for a house you can get a loan only by sending boring documents online to the bank.
You do not need the direct presence of a bank customer, though with a special electronic signature. There are many positive aspects to online loans, including the most important plus is the ability to process all documents without leaving home. In addition, it is also very important to take into account the timing of the consideration of the submitted documents on the allocation of the loan from the bank. Usually with an online loan, consideration periods are shorter.
2. How to Gain the Trust of Financial Institutions?
If your credit rating is currently low and you don’t know where to take a loan in this position, use proven methods.
- Pay off debt. The sooner you pay off existing debts, the more, in the future, you will have a chance to get profitable installments. In difficult financial situations, one loan can be repaid by another, for example, in the case of a delay.
- Use loan products. People who regularly take and regularly pay different loans, cause more confidence.
- Find a guarantor. Banks and financial institutions safely issue large sums to individuals with guarantors.
- Ask your employer to issue you as a full-fledged employee. A loan without formal employment is more difficult to obtain. A person who receives even the minimum salary with “clean” money will receive more trust from the bank than a secured client who has an unofficial source of income.
- Explore your credit history. You can get information about your current rating in any bank for a small fee. Based on the data, try again to avoid old mistakes.
3. What Are the Benefits of Instant Loans?
The loan benefits include:
- Ability to apply online;
- The availability of loans for both individuals and commercial companies;
- Term loans can get borrowers without a permanent job and certificates of income;
- The minimum period of time of registration of the contract and receipt of cash.
- The growing popularity of microloans is largely determined by the individual conditions of cooperation, which the borrower can choose, taking into account all the specifics of his situation. An important factor is the possibility of lending to certain categories of the population with which banks do not want to cooperate. These include: students; pensioners; military; people who aren’t employed officially. Already today, microfinance organizations are given preference to much more often than banks thanks to extremely favorable and affordable terms of cooperation.
4. Do People without the Permanent Employment Get a Loan Approval?
The unemployed are people without a permanent job and not officially employed. That is, a person falls into the category of the unemployed, even actually having a source of income, but not confirmed officially. The tough competition in the lending market forces banks to offer loans to this category of potential customers. The unemployed get all the same cash loans without income certificate.
One of the popular loan products demanded by this group of borrowers is an express loan with minimum requirements for the borrower’s package of documents. An express loan can be obtained by presenting a passport and possibly another document, for example, a driver’s license, an insurance pension certificate, TIN. Confirmation of employment and income is not required by various references for obtaining a loan. The decision to issue money on a loan application is made within 20-40 minutes. Banks initially overestimate interest rates to offset the high risks on express loans. Interest rates on these loans are 50-60 percent per annum.
5. Are There Any Risks When Contacting Credit Brokers?
Newspapers and online publications are overwhelmed with announcements of assistance in obtaining a loan for the unemployed from various brokerage agencies. When contacting such institutions, the borrower provides information about himself and names the loan amount. Brokers, having information about the approximate banking scheme of verification, help to issue a loan to a client in any bank, providing false information about his place of work. At the same time brokerage agency services cost 5-25% of the loan amount.
The responsibility for the loan falls on the borrower, and if he is caught in providing false information, it will be reflected in his credit history. It is also impossible to exclude the possibility of fraud on the part of brokerage houses, which take away part of the loan in the event of a positive decision on the borrower’s application, without doing anything at all. The decision to conduct business with the brokers, each borrower takes for himself. Doing business with such intermediaries may be too dangerous, but for the most part they provide significant assistance in obtaining a loan.
6. How Old Must a Customer Be to Get a Loan?
There are not many banks issuing loans since the age of 18. Unsecured loan amount will be not more than 100$. In the presence of guarantors, you can count on a larger amount. From the age of 18, cash loans are granted on the security of property. The interest rate will be lower, and the maximum loan amount increases significantly.
From the age of 18 (for women and men), it is possible to issue a so-called microcredit with an amount of up to 25,000 rubles, for a period from 26 to 52 weeks. Money is issued within one day and only a passport is required for this. It is easier to get a loan for women from the age of 18, because banks have more confidence in them than men. Most banks, with their lending requirements, indicate the minimum age of the borrower: a woman is 18 years old; man – 21 years old. As for the payday lenders, they require customers to be not younger than 18.
7. What Should I Be Guided By When Getting a Loan?
It is preferable to be credited in the bank that serves your credit card. In this case, you can count on preferential terms and bonus offers. If the salary bank does not meet your requirements, it is reasonable to pay attention to large, state, or foreign banks. Reduced risks cause lower rates in such banks. Pay attention to the size of the overpayment. It can be an even more eloquent indicator of the profitability of a loan for you than the interest rate. Obligatory analyze the full cost of the loan (or effective rate). This is one of the first criteria by which you can determine whether you take a cheap or expensive loan.
The total cost includes not only the nominal value, but also various fees charged by the bank for processing and servicing the loan. It must be remembered that one of the marketing tricks of the absolute majority of banks is to offer the so-called “loan without interest”. But this very “interest-free” banks can easily compensate for multiple fees. That does not always make such a loan the most profitable.
Take intom account the amount of the deposit, its term and currency. A period is preferred with payments of 25-30% of your monthly income. And the amount is calculated according to the principle of applied necessity. In case of payback, the insurance policy should always be. In particular, with a solid loan amount. Always be careful when studying the contract. Special concentration requires items with the symbol “*”. And, as we all remember, “the most interesting is written in small print” .
8. What to Do If You Can’t Repay the Bank Loan On Time?
The most important thing in this situation is not to panic, because panic generates even more terrible thoughts that will not lead to anything good. It is important to keep calm, it will allow you to sensibly assess the situation.
Do not avoid the bank, which is the lender. Correct the situation will not work, ignoring the bank calls, it will only worsen the situation. A person who can no longer handle the repayment of a loan is better to contact the bank for debt restructuring. In this case, the bank may issue a deferment of payment. This will give the borrower time to find a high-paying job to be able to pay the loan. No one will deal with the problems of the debtor, the person himself must figure them out.
There is an option to ask for help from relatives or friends, but, this is also not suitable for everyone. Someone has no relatives or friends, someone has, but will not receive help from them, because he is in bad relations with them, or they do not trust them. Also, you can always take a microcredit to make a payment and not accumulate interest on the debt.
9. What Is a Microfinance Organization?
There are 3 forms of organization through which microfinance organizations carry out their activities. The online model allows you to provide the necessary service to the population efficiently, quickly, 24 hours a day. You can apply for a loan using any device that provides Internet access. Decision on approval is made as quickly as possible. The classic model of the work of microfinance organizations through points of sales and agents provides a fairly high and high-quality flow of clients. After approval of the application, the money is transferred to the card or transferred from hand to hand. The hybrid model in the field of microloan business is rapidly gaining popularity due to the release of most of the classic organizations online and includes both work with clients in the office and processing loans through the Internet. Small loans in this case can be issued remotely, and for a larger amount the client can drive to the office.
10. How to Fill Out a Loan Application Online?
To get a loan on the Internet, you need to go through several stages:
- Register in the online lending service by filling out a form. It will be required to enter information about what field you work in, how much you receive (including unofficially) and how much you spend, whether you have loans in other institutions, whether there were delays, etc.
- Get the answer from the manager. The customer support will not take you long to wait, since it processes data from applications not manually, but automatically – instantly. In the case of a positive decision, you will need to read the terms of the contract and put a mark at the end that you agree to them.
The amount you need will be instantly transferred to your bank account. In most cases, it is about five minutes, but some may take longer — up to three business days.
11. What Is important to know about early repayment of the loan?
Some financial institutions charge a fee for early repayment of the loan, so these aspects need to be clarified with the lender in advance. Typically, the interest rate can range from one to ten percent. At the same time, banks are not interested in early repayment of the loan. This is quite natural, because banks want to make the most money on each borrower, and for this it is necessary that he be on the “hook” as long as possible. What is the situation with insurance? In most cases, the client is required to sign an insurance contract. At the same time, a company can only be selected from the list offered by the lending bank. Although, the insurance itself is not mandatory.
How to repay debt? There are two types of debt repayment that are popular among borrowers today – differentiated and annuity. At the same time, the latter is more common, and most financial institutions offer their customers this particular method of payment. Its convenience lies in the fact that the person knows exactly when and how much will need to pay the bank.
Hope that now you know more about loans and can make a reasonable decision whether you need to get a loan or not and how to benefit from getting it.