2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The most popular service provided by commercial banks is a consumer loan to individuals. And no wonder, since this type of lending can bring good income for financial institutions in our country. This is due to significant interest rates. So, for a year, taking into account commissions and interest, the consumer overpays about 40% of the loan body.
Consumer credit to individuals: some characteristics
Sales market - individuals, hired workers. Credit is issued only to hired workers. The loan amount depends on the wages of the latter. Even if the bank's advertisement says that in theory you can get a significant amount of cash, in practice the loan will be calculated only based on the level of your income. Basically, the maximum loan amount is about three salaries. Subsequently, if the payer fulfilled its obligations on time, the bank may increase the limit to six of the borrower's average monthly salary.
The interest rate on consumer loans to individuals is much higher than on other creditproducts. This is due to high credit risks: in fact, this type of loan is not secured by collateral. In addition, there is always a risk of dismissal of a person from work, and subsequently the occurrence of delays in payments. Such a concept as low consumer credit is a marketing ploy of financial companies. With low rates, it will be unprofitable for the bank.
It is advisable to familiarize yourself with the terms of the loan before choosing a creditor bank. There are times when in advertising you can hear only one interest rate, but in reality there are also monthly commissions, insurance, and more.
Does the bank check the borrower when applying for a loan?
Each bank is reinsured and tries to reduce its risks. Therefore, when borrowers apply for a consumer loan to individuals, the bank performs a comprehensive check.
First of all, the borrower is checked through the credit bureaus (BKI). If you have already taken a loan, then the BKI will issue information to the bank on its repayment upon request, and will also form your rating. The further decision of the bank on lending to a potential borrower depends on this information.
Each bank has a different approach to credit history: some take information for the last two years, others for five years.
Separately, I would like to note a consumer loan without income statements. The amount in such loans is much lower than with certificates, and the rates are much higher. Therefore, it is recommended to use such a loan only in extreme cases.cases.
Things to Consider for Potential Borrowers
-
Consumer credit without references Before you take a loan, you need to think carefully about this point. Don't take it unless absolutely necessary.
- Please note that it is comfortable to pay on a loan that does not exceed 25% of your net income. In this case, the borrower will have free money, intended for other needs.
- Don't take out a loan "to the eyeballs", as a change in your salary will lead to delinquency on the loan.
- Keep track of your credit history, because you never know what can happen in life, so take care of the future.
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