Personal Loans: what they are and how they work
In an ever-changing economy, with changes often very sudden, the possibility of accessing immediate liquidity at an affordable cost can be a solution to cope with the various needs of life. Not only can access to credit be useful for different purposes, from buying a car or an appliance, to consolidating debts, or making an investment, but also to have a cash supply to meet the needs of everyday life. Personal loans in the last few years are a simple and fast way to access a sum of money. The offers of banks and financial institutions are many. Added to this is also a very wide range of online proposals. But what are personal loans? How does the request work? Below we will analyze their characteristics so as to be able to evaluate in the best way what the loans are.
What is a personal loan: its characteristics
A personal loan is considered a type of loan that falls within the so-called consumer loans and is carried out by a bank or a financial company directly to the individual subject without a specific finalization. For this reason, non-finalized loans are also defined. Specifically, it is a grant of an amount of money that must be repaid after a period of time by the debtor according to an amortization plan specified at the time of subscription. The debtor may use the sum granted for his own purposes and without having to justify any use of the money.
Accessing a personal loan is a fairly simple thing. The offers present are so many, but the possibility of seeing the loan effectively recognized is quite different. It is necessary to consider a series of elements in order to obtain it and to make the most advantageous loan:
– documentation and guarantees: personal loans are loans for all purposes . As such, a series of vestments required to demonstrate to the bank or financial institution their income capacity is required. At the time of applying for the loan, you will then be asked to submit documentation certifying your ability to fulfill the payment of installments. There is no major problem in receiving a loan for payroll or pension holders. In the event that you do not have a permanent employment contract, as self-employed you will need to submit your last tax return. It is important to consider that the application may also affect the existence of another loan, such as the assignment of the fifth of the salary, or missed payments in the past of installments of another loan. Before asking for an early staff it is essential to regularize their positions;
– amount: the sum of money that will be established is calculated based on the guarantees presented. If you are a holder of a pension or a permanent salary, a maximum amount will be calculated to be obtained on the basis of the installments that can be borne by the debtor. The installment can never exceed the value of one fifth of the salary or pension. You can receive personal loans ranging from € 1000 up to € 80,000;
– installments: the repayment of the loaned capital takes place on the basis of a number of installments which is established on the basis of the amount requested. It starts normally from 12 months to a maximum of 10 years;
– finalization : there is no precise reason for the loan application, as in the case of a loan for the purchase of an apartment;
– interest rates : compared to other types of financing, personal loans have a slightly higher interest rate, with a higher loan cost compared to other types. The motivation is the fact that they are aimed at a purchase of an unspecified asset;
– issue: a big advantage of personal loans is to have very short emission times . Once the documentation from a financial institution has been ascertained and verified, it will be sufficient from 24 to 48 hours to receive the requested sum on your account.
How a personal loan works: what are the ways to receive it
The request for a personal loan can be made at any time by a financial institution or a credit institution. It can be very useful to compare the different types of offers that will be made in order to subscribe to the most convenient financing. Comparing rates such as the TAN and the APR can be very beneficial in order to take out a better loan. Once the bank or the financial institution with which to make the loan has been decided, it will be necessary to go to the reference desk with the required documentation. Today it is also possible to make the process faster thanks to online platforms.
There are some finance that allow you to make the request directly on the web by sending the required documentation and then only signing up at the office. In any case, you will be asked for, a document of identification, tax code, any pay or retirement statute or tax return.
In recent years, thanks to the presence of a greater number of financials, the time required for issuing a financial loan has been greatly reduced. For this reason, once the documents have been verified from the moment of the request, it will be possible to receive the amount within a maximum of one week . The return will take place through the agreed installment plan. Some loans also provide the possibility to be customized with regard to the payment of installments. For example, it will be possible to skip one or more installments with a prior request , or to change their number within the loan period. Before signing it is important to consider every aspect concerning the return method in order to be sure and certain of the commitment that has been decided to face. In fact, in some loans it will be possible to extinguish it even in an anticipated manner, while in others it is necessary to pay a minimum amount of installments after which it will be possible to close the debt without any penalty.