Many people have experienced financial difficulties. There are several ways to solve such a problem. For example, you can ask for a loan from your friends or relatives. But can they find the right amount for you? And how will you look now in their eyes? Alternatively, you can find a quick part-time job. But work is not "handed out" at every step, and how hard will it be? After all, no one will offer good earnings for the minimum time of work. In such cases, a bank loan becomes a panacea. But is everything as simple as it seems at first glance?
It is profitable for banks to give loans to everyone in a row
This is a delusion of every borrower who is going to take out a loan. There are certain principles of lending on which this process is based. Only by strictly observing them, a banking institution will be able to profit from issuing loans. The only exceptions are microcredit companies, but we will talk about them a little later.
In an attempt to understand the principles of bank lending, many future borrowers are often confused, because inMany sources provide information using specific terminology. But it's actually much easier than you think.
Basic principles of lending
The first and main principle that the borrower will have to deal with is repayment. In simple terms, the need to repay the debt in full. Of course, no creditor will provide a penny if it is known from the outset that the money will not be returned. This is as unnatural as lending to your friend, knowing that he will definitely not return the money, otherwise it is simply called a gift. Although domestic history is familiar with cases in which the principles of bank lending receded into the background.
The so-called non-refundable loan was popular in the agricultural sector and was aimed at bringing the borrower out of a crisis situation. The catastrophic financial situation of the borrower suggested that the debt would not be repaid or not repaid in full.
This type of financial assistance bears little resemblance to classical lending. It involves, rather, budgetary assistance and is carried out through state points for issuing loans. In other cases, lending principles such as repayment are the main condition for obtaining a loan.
How does the bank understand whether the borrower will be able to repay the loan, and will he have enough funds for this? When drawing up the contract, the responsible officer carefully checks all the data of the future debtor. The borrower collects a package of documents that cancontain both a certificate of income and documents for property owned, depending on the requirements of a particular bank. For an individual, a guarantee of constant solvency can be wages, interest on deposits, a loan from another bank, or, for example, social benefits. Legal entities, in turn, regularly receive revenue or profit.
After analyzing all this data, the bank employee, along with the security service, decides whether it is possible to issue a loan to this client, and the principles of lending are diligently observed in this case. But the bank itself has the ability to influence the provision of repayment. He sets interest rates and "financial aid" conditions to be affordable for the average borrower.
Return the loan when I want
Such a scheme will not work in any case with serious banks. This is simply prevented by the principle of urgency. This means that the loan must be repaid exactly within the time specified in the contract. We are talking not only about the deadline date for the full repayment of the loan amount and interest, but also about the billing period of each month. When drawing up the contract, you are told by what date of each month and what the minimum payment must be made to the account for repayment. A delay of even one day can result in a large fine for the payer.
However, some lenders provide their borrowers with a certain loy alty system. For example,"forgive" the amount of the first fine, if the mandatory payment was nevertheless made in the nearest (specified by the bank employee) time. For the convenience of making payments, many banks offer their customers to issue a card with a billing date. The borrower simply replenishes his card with a certain amount, and on the day of the mandatory payment, the required amount is simply automatically debited from the account. This simplifies the repayment system and eliminates cases where the client simply forgot about his settlement date. Ignoring such principles of lending as urgency, you can get into the database of problem debtors of the bank, as a result of which the next time you can safely refuse to issue a loan, even if the previous one was paid in full.
Requirements for the payer
First of all, banks are engaged in lending for profit, and not for helping everyone in need, so you need to be prepared that you will have to pay for the loan service in full. This determines such a principle of lending as payment. Paid means that the borrower is forced not only to repay the body of the loan on time, but also to pay interest for using the bank's money, as well as all accrued fines and costs for the period of use. By the same principle, a banking institution accepts money for a deposit. On contractual terms, the depositor deposits a certain amount into the account and receives interest from the use of his personal funds by the bank. Similarly, the borrower pays for the service of using the bank's money. As a result, both parties are interested in making a deal.
Essence and principleslending
There are also other factors that affect whether a person will receive a loan. For example, if we are talking about a fairly large amount, then in most cases the presence of guarantors, collateral or other guarantees will be required. The lender must be sure not only that various types of payments are regularly received on the debtor's account, but also that the payer is sufficiently secured to repay the amount of the debt even if the cash receipts suddenly stop.
For example, a loan was given to a working person with a good salary. But due to certain circumstances, he lost his job and cannot find a new one. How then to be with the payment of the loan? But it often happens that the borrower simply refuses to pay and thinks that he can get away with everything. The bank cannot take such risks and distribute funds to everyone. The presence of guarantors or property is an additional guarantee of full repayment. This is the principle of security.
Loan without security principle
Since there is no criminal liability for non-payment of a loan (only when it comes to super-large amounts), a persistent defaulter can only be held administratively liable, which means forced to repay the debt through the court and the executive service. This means that the current accounts of the borrower will be blocked, and an amount equal to the amount of the debt will be debited from them. If there are none, then about 20% of the income is withheld, inin some cases - 50%. If the borrower does not have official income and accounts with funds, property is targeted. It is allowed from the auction at the minimum price and the amount of the debt is covered. But if the borrower is "poor as a church mouse," then there is nothing to take from him, he is bankrupt. The security principle nullifies such cases.
The target character is also important. The lender has every right to learn about the purposes and needs for which the loan is taken before disbursing the required amount.
Which companies are breaking principles?
There are a number of micro-lending firms. These can be small organizations or even online loans. In most cases, a person in need of financial assistance simply fills out a short form in which they indicate passport data, registration, phone number and other information necessary to complete the application. The approval procedure is quite fast, the principles of lending fade into the background. However, there are also pitfalls. Large sums from such companies should not be expected, especially if the loan is taken for the first time. The interest on such loans is much higher than the average market, and the terms are incredibly short. Fines for delay will accrue huge, and they will grow every day. That's the price of urgency.
Now you know what the principles of lending are. It is worth thinking carefully before becoming a borrower, carefully study the contract and choose a worthy company with a good reputation in the marketlending.