In the modern economy, credit relations are widely used. Therefore, you need to know what loans are and what economic fundamentals they have. This is important for the effective and proper use of loans and borrowings as a tool to ensure financial needs.
Cash loan. What is it?
In a credit transaction, the subjects of relations are the lender (private person, organization or bank issuing a loan without guarantors) and the borrower, individual or legal entity who needs money, usually cash.
Consumer credit is most widespread. Everyone knows what loans are, but not everyone will answer how to get them guaranteed. Basically, these loans are provided to citizens in the form of cashless or cash. In the first case, these are loans to pay for the services of organizations or goods (for example, dentist services, travel packages, etc.), in the second - targeted loans.
Loan purpose
Usually the main essence of a loan is an increase in the solvency of the population and, as a result, an increase in commodity circulation. Demand for credit is born with the demand for goods, on the other hand, the growth of loans increases the demand for goods. This effect is very noticeable in a market saturated with goods. Today, obtaining a consumer loan is one of the most popular and generally available operations of the bank. Absolutely any citizen from the age of majority (or age established by the bank) can take a loan by providing a work book, income statement and other documents necessary for the bank. Consumer credit can be obtained in cash without reporting income. But there is less likelihood of approval of the loan by banks. When figuring out what commodity or targeted loans are, it is worth remembering that the borrower only needs to provide a passport (regardless of whether it will be a phone store or a travel agency). But this type of loan can be obtained not at a bank, but at organizations selling necessary goods, and for a small amount. A bank gives a borrower for serious needs (buying a car, paying for education) a consumer loan on certain conditions, for example, upon presentation of a statement of income, a document on ownership of property, etc. Each bank has a different conditions for issuing a cash loan.
Cons Loan Disadvantages
Consumer loans, without a doubt, in addition to a number of advantages, have disadvantages. An average citizen can take a loan from a bank in order to solve the problem of sudden expenses (urgent departure to another city, car repair, and other circumstances) or to fulfill other desires that seemed unrealizable: buying a laptop, home theater, or vacation abroad.
However, when receiving a cash loan, one must take into account all the pitfalls that are difficult to notice for an unprepared person.
Banks talk about low interest rates (an average of 15% per annum) and ideal conditions, but in fact, huge additional fees may be hidden behind it - up to 70% per annum.
Many banks charge huge fees for repaying a loan before the due date.
The bank is obliged to report only the interest on the loan for the year. In addition to annual interest, there are other payments, for example, a commission for considering a loan, for issuing a loan itself, for drawing up a sale and purchase agreement, for maintaining an account. How to get a cash loan and not get to these pitfalls? The easiest and most successful way is to turn to specialists who know all the financial and banking nuances and subtleties.
Cash loan as an urgent decision
Lending is a rather difficult type of relationship in the economy between the lender and the borrower. Borrowers who are consumers of banking financial services do not have enough experience in obtaining credit products, concluding insurance policies, contracts, or commission accounting. Therefore, a lot of quite important information remains unknown to them.
Everyone had a situation where they needed critical money urgently. Why they are needed is not important: it can be a gift to a loved one, a purchase of new household appliances, a long-awaited trip during the holidays, repairs in an apartment, as well as many other things without which in the modern world - well, nothing. You can wait a very long time until you have the required amount on hand. What to do?
It is in this situation that people turn to the bank. A cash loan is an ideal option. This service allows you to quickly receive cash.
The question is what are loans and how to get them? Making this loan is a streamlined and fairly simple procedure that takes only a day. The conditions for obtaining a loan are elementary, the number of documents is minimal: a passport of a citizen of the Russian Federation, registration, plus one more document of your choice. But here there is a significant minus - the bank takes an inflated interest for such a loan.
Express loans
In Russia at present, getting an express loan is becoming more and more popular; this is one of the varieties of consumer lending. This type is beneficial for banks, therefore, this method is practiced in any financial institution. This loan is suitable for individual entrepreneurs, managers or owners of commercial organizations, for individuals.
In essence, this is a type of consumer loan: express loan is issued in cash to the borrower. It differs from others in that applications are processed quickly and few documents are required. Usually you need a passport or other identification document, a passport, a pension insurance card and a driver’s license. If the borrower during the inspection is suitable for the requirements of the bank, then a loan can be issued within a day. But you should not be especially happy about getting this type of loan. The bank issues it with the maximum benefit for itself; accordingly, an express loan differs from others in a large amount of payments. Such loans are the most expensive of all consumer loans: the interest rate is much higher, because the bank checks the borrower minimally. This means that the bank has a huge risk of default on such a loan. Therefore, express loans are given only for a short period and a small amount.
If we take the procedure for obtaining an instant loan for a private entrepreneur, then it is no different from the usual one, and the loan ceiling is at the level of 500,000 rubles.
Features of express lending
1. The loan provided is always calculated exclusively in national currency and is always issued in cash.
2. The shortest possible time frame for making decisions on granting loans - as a rule, within one day.
3. The most simplified procedure for obtaining. A minimum set of documents is required, a loan can be issued quickly enough, and there is no need for guarantors.
But such favorable conditions also lead to some nuances. The bank takes a serious step by providing a loan to a person, while possessing the most minimal information about it. Therefore, as a rule, banks compensate for this with a high interest rate, a monthly commission, and also rather high requirements for the amount of a one-time payment for bank services.
Pros and cons of lending
No matter how frightening the concept of “permanent life in debt”, lending has become an integral and often very convenient feature of our lives. This industry is developing noticeably so that ordinary people take more and, as a result, return even more.
Nevertheless, such a gloomy prospect still confronts the no less gloomy reality of our days. Having an average income, most of these inhabitants would not have the actual chance to afford a sufficiently large range of goods necessary in everyday life. Unless to put aside in the old fashioned way in a bank on a shelf. But rising inflation and price spikes in the market contribute very little to this, prompting all the same to spend on oneself as needed arises. By the end of life, accumulating is quite realistic, but alas ...
That is why many people in our time prefer to receive today, rather than wait and endure indefinitely. The prospect of being in debt scares a person a little if there was a smart approach to business, and the house already has new items that brighten or make our life easier.
The nuances of living on credit
Credit transforms life. You get a good reason to reorganize your daily life and work for the subsequent optimization of costs, with the expectation that part of the salary still has to be paid for a loan without guarantors. Hence the direct incentive to work better and more efficiently to receive additional working benefits or even increase. By the way, the very benefits for the sake of which loans now hang over you are not illusory. They help to develop and make life easier now, as well as improve the conditions of existence - mobility, quality of rest, quality of health and so on. This, of course, entails moral and psychological growth, since the foreseeable real increase in the quality of life always gives reason to be proud of yourself and once again rejoice at a new day. And if you do not bother yourself with the fact that a huge percentage of hard-earned money is taken away by those innumerable debts - you can quite sincerely enjoy life and believe in your success.
Credit Responsibility
But not everything is so cloudless. If you return to the land, then a loan is not only a new refrigerator here and now, it is also a huge responsibility. It is necessary to monthly pay the estimated amount of funds, which, in turn, must be earned. In addition, you first need to find out where to get a loan. There may be several options - banks, private credit organizations , etc. This entails fears for maintaining a job and a salary level, as an option - body wear caused by excessive zeal and diligence at work. Stress is an integral part of any lending. The constant looping feeling that you constantly owe someone is not pleasant, but if it also sits firmly in your head 24 hours a day, new things may not bring any pleasure.
Such complications can be avoided if one approaches the issue wisely and with due consideration. Do not overestimate your capabilities. It also greatly simplifies the matter of choosing the right type of loan, of which, fortunately, in our time there are a sufficient number, and each is maximally adapted for the desired purpose. It is very good if the loan received is spent on something that does not become obsolete and does not depreciate over time. For example, housing. For housing, there is a special mortgage loan, designed for the average layman, but at the same time - for long periods and large amounts. A mortgage can immerse you in an incomparable sense of being in debt for 10-20 years, but then you become the real owner of this very housing. This is much more practical and better than a perpetual rental, and subsequently the contribution can even pay off.
How to properly understand the possibilities and types of lending? Credit
agents are always ready to help with this. Turning to them, you get invaluable help and free advice.
Scoring, or Why do not give a loan
Today in Russia, bankers are expanding the lending market. But the right path and approved plan has not yet been invented. It happens that a decent client is not given a loan or given at high interest rates. And they can give only a part of the requested amount. Even worse, if this situation begins to recur in many banks, and the client cannot understand what is the matter.
Typically, the client fills out a questionnaire in which there are tricky questions. And the score for all answers is set by the machine using credit scoring. It’s useless to argue with him.
Scoring is a compromise in assessing the ability of borrowers to repay a loan. The Credit Committee cannot personally consider all applications, and the number of loans issued should increase. Scoring is based on a mathematical model that tries to identify a mandatory and solvent borrower. It happens that such borrowers do not get a loan. The scoring system in Russia has just begun to operate, banks do not yet know how to apply it as correctly as possible. It should be remembered that scoring is just a mathematical program, and it has no purpose to humiliate the borrower. Its task is an acceptable amount of risk with the right level of credit. Banks minimize the risk of non-return, but so that there is profit from the scale of the business.
In general, banks are in the habit of evaluating their former customers by various target groups - from bona fide to unreliable payers. The position may change dynamically. Evaluation, as a rule, takes place according to a dozen basic parameters, such as the presence of a car, the stability of stay at the same place of work and a number of others. It is on these indicators that the corresponding scoring models are built . For example, if a borrower regularly changes his place of work, residence and often drinks, it is logical that giving him credit is extremely risky.
Scoring techniques
Banks usually use 3 different methods of constructing such models of the right customer. Firstly, this is a self-built model based on the profile of the target borrower. A reasonably convenient and objective model that allows you to fine-tune the system to the best performance and efficiency. Secondly, this is the use of a scoring model of another bank. Plagiarism is plagiarism, but why can not you use someone else's, but already existing experience? As a rule, such models still have to be developed to the level required by a particular bank, but most of the work has already been done and, importantly, worked out. And thirdly, the creation of an ideal client model. High requirements, which can be met exclusively by the "golden" client. The bank can only once again make sure that this "golden" client actually exists and condescended to them to ask for money. Such a scheme is usually used only for certain types of loans, and not for entire banks, and guarantees good protection, but, alas, a high percentage of screened potential customers, which also guarantees good losses to the bank. But they are protected from scammers.
Domestic banks are still only studying in this field, and therefore do not yet have significant experience in using such techniques. As a rule, the accompanying risks are covered by rising interest rates on the loan, and the target borrower is evaluated more and more on the credit history, if any. Such nuances hinder the development of demand among consumers. All these factors make secured loans much more expensive than the same mortgage, for example.
Banks are not always clean and transparent. Some wind up additional hidden commissions and interest, place in advertisements not quite real indicators on loans and so on. Such practice helps a lot to increase the bank budget, but it is fraught with the fact that the bank does not need the credit history of its customers - most often they apply for credit to other banks, realizing what’s what.
Do not forget that refusing a loan is not always the fault of the bank. Customers often try to embellish or hide their true characteristics. Very often, failures occur when detecting loans received from other banks. As a rule, banks look at the good faith of each client according to their credit history, if any.