Consumer loans to individuals - little truth from the expert

The most popular service provided by commercial banks is consumer loans to individuals. And no wonder, since this type of lending can bring a good income for financial institutions of our country. This is due to significant interest rates. So, for a year in view of commissions and percent the consumer overpays about 40% from a body of the credit.

Consumer loans to individuals: some characteristics

The sales market is individuals, hired workers. The loan is given only to hired workers. The loan amount depends on the size of the salary of the latter. Even if the advertisement of the bank says that theoretically you can get a significant amount of cash, almost the loan will be calculated only based on the level of your income. In general, the maximum loan amount is about three salaries. In the future, if the payer fulfills its obligations on time, the bank can increase the limit to six monthly average wages of the borrower.

The interest rate on consumer loans to individuals is significantly higher than for other credit products. This is due to high credit risks: in fact, this type of loan is not secured with collateral. In addition, there is always the risk of dismissing a person from work, and subsequently the occurrence of delinquent payments. Such a notion as low consumer credit is the marketing process of financial companies. With low rates, he 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 you can only hear one interest rate in advertising, but in fact there are still monthly commissions, insurance and so on.

Does the bank check the borrower when making a loan?

Each bank is reinsured and tries to reduce its risks. Therefore, when the borrowers apply for a consumer loan to individuals, the bank performs a comprehensive check.

First of all, the borrower is checked through the credit history bureau (BKI). If you have already taken out a loan, the BKI will issue a request to the bank for information on its repayment, and also form your rating. The further decision of the bank on lending to a potential borrower depends on this information.

In each bank, the approach to credit history is different: some take information over the past two years, others take five years.

I would also like to note a consumer loan without income statements. The amount in such loans is much lower than with the references, and the rates are much higher. Therefore, the use of such a loan is recommended only in extreme cases.

Moments that need to be taken into account by potential borrowers

• Before taking a loan, you need to think carefully about this point. Without much need, do not take it.
• Pay attention to the fact that it is comfortable to pay a loan, which does not exceed 25% of your net income. In this case, the borrower will have free money, intended for other needs.
• It is not necessary to take the loan "to the eyeballs", as changing your salary to a smaller side will lead to the appearance of delinquencies on the loan.
• Watch your credit history, because you never know what can happen in life, so take care of the future.