споживчий кредит

How to choose a consumer loan?

A consumer loan is money you borrow from a bank to buy goods and services for yourself or your family. Consumer credit is issued only to individuals, it cannot be issued to an organization.

In addition, there are consumer loans. They can be taken from microfinance organizations (MFIs), consumer credit cooperatives, and pawnshops. It is essentially the same as a loan, but the terms of the loan can be very different from the terms of the loan.

What are the types of consumer loans?
They can be divided according to several characteristics:

According to the purpose,
the Consumer loan can be for a specific purchase — targeted, and without specifying future expenses. For example, if you issue a POS loan at a furniture or electronics store, the bank transfers the money directly to the seller. This is a targeted loan. If you take a loan or loan and do not report what it was spent on, it is considered non-targeted. For targeted loans, rates can be lower, especially if it is a partner program of the store and the bank.

When you take a loan for a large amount, the bank usually requires additional guarantees that you will pay it back. A loan is often secured by collateral, such as a car or other property, or the guarantee of others. If the item is in a bank lien, you can continue to use it, but you cannot sell or give it away. In addition, the bank may ask to insure it. On the other hand, secured loans usually have lower interest rates than unsecured loans.

By terms
The division by terms of credits and loans is usually very different. For MFIs, a loan of up to 30 days (up to salary) is considered short-term, and for banks, short-term loans – up to a year. The term has a great influence on the interest rate on credit and loans. Usually, the longer the term, the lower the rate. But it is not always necessary to study the conditions of a specific organization.

What do you need to do to get a loan?

Each bank, MFI or other organization sets its own rules. For example, to get a loan from a pawn shop, it is enough to show your passport and leave something valuable as collateral. For a consumer loan at an MFI, only a passport is usually needed, it can even be issued online. And the bank, before giving you a loan, especially for a larger amount, can set many more conditions. But several general requirements can be identified.

There are only two mandatory documents to submit
: a passport of a citizen of the Russian Federation with a registration mark (or another identity document) and a loan application.

When applying for a POS loan, consultants often ask to show a second document with a photo, for example, a license. This is necessary so that fraudsters cannot obtain credits and loans based on other people’s documents.

“I needed a loan for a large amount, but I had open defaults on other loans. On the Internet, I found a company that helps to arrange a loan in one of several banks for a commission of 3-5%. I filled out the application. The broker called back and introduced himself to Ilya. He offered to make the documents…”

Be careful, don’t step on someone else’s rake!

Banks may require proof of income or other documents confirming your financial capacity. A complete list of documents can be found on the creditor’s website or in its office.

Report your income
You don’t always need to document your salary, pension or scholarship, but you usually do. The largest loan amount depends on this. The higher your income, the larger the loan you can repay.

If you have guarantors, you are ready to pledge property or insure for the benefit of the bank, then the amount of the credit or loan can be even greater. After all, the bank takes less risk in this case.

Take out insurance
Often in credit agreements there is a clause that obliges you to insure the subject of the pledge, your life or health. By law, you are not required to do this, but the insurance will allow you to reduce possible credit risks, for example, to keep the mortgaged property, if you suddenly lose your job and cannot pay the loan. With such insurance, the bank can offer you more favorable conditions in terms of loan size, term or interest rate.

If the bank offers a loan with simultaneous life and health insurance, it is obliged to offer an alternative loan option without insurance, but under conditions comparable in terms of the amount and repayment period. You can refuse to buy insurance, but then the terms of the loan will change.