Today it is not at all necessary to accumulate the amount of funds necessary for a purchase for a long time. Banks and other credit institutions provide an opportunity to buy goods in equal installments, use borrowed funds for any needs to buy furniture, repair or spend funds on a trip. In other words, you can use the consumer lending service.
A personal loan is one of the most popular forms of credit products that allows you to take out a loan for any personal expenses or buy a product with deferred payment. Depending on various purposes, personal loans can be roughly divided into types: loans for urgent needs, loans for holidays, for repairs, for medical bills, etc.
In this type of loan, objects can be both money and goods. For example, you can issue a loan in a short time at the place of purchase if there is a representative of a partner bank in the store. If there is no representative, you can present an invoice for payment directly to the partner bank for the subsequent signing of a loan agreement; or simply apply for a loan in any commercial bank, specifying the amount you need in the loan application.
As a rule, the term of a personal loan varies from 6 months to 2 years, the amount – from $100 up to $5,000. Loan currency is dollars. When signing a loan agreement, carefully study the loan terms and pay special attention to the upcoming costs of the loan.
When issuing a personal loan, banks put forward a number of requirements for borrowers: age, the presence of a confirmed permanent income, residence, etc. Usually, the loan is repaid monthly in equal installments calculated in accordance with the terms of the loan agreement.
Types of pesonal loans
There are various types of consumer loans: loans for urgent needs, loans for the purchase of goods, loans for holidays, for repairs. Let’s consider the purpose and advantages of each of them.
The main advantage of a personal loan for urgent needs (they are also called non-targeted loans) is that the borrower gets money directly in banking account. There is no need to make down payments and inform the bank about what the funds received was spent on. Sometimes this type of consumer loan turns out to be even more beneficial than a mortgage or auto loan.
In retail stores, there are offers to take the desired product on credit. In this case, the loan is issued directly in the store, the loan processing takes no more than half an hour, and only an ID is required. Stores often organize, together with banks, various promotions in order to attract buyers. The speed and convenience of issuing such loans are often offset by high interest rates.
The personal loan for holidays helps to solve the issues related to financing tourist trips abroad. Due to limited funds, it is quite possible that you are faced with a choice: save money and choose a cheaper tour or postpone your trip. Nowadays, you can take a tour in installments by paying the down payment and the rest of the amount in equal installments before or after the rest. It is worth paying attention to the fact that many banks do not provide a loan for vacation as a separate type of lending, but offer to use a loan for urgent needs.
How to repay a personal loan?
Usually, a special (loan) account is opened to repay the loan debt to the borrower, where the loan debt is recorded.
In this case, it is recommended to independently monitor the timeliness and order of payments, specifying the amount of your own debt by directly contacting the bank, or by phone. Banks send an account statement, but the efficiency of the mail can fail, and high penalties and fines are charged for late payments. For the same reason, you should not postpone the loan repayment until the last day. In addition, not all banks immediately take into account the funds deposited by them, doing it at midnight or the next business day.
The easiest and most economical option for paying off the debt is to deposit the required amount through a branch of the creditor bank or an ATM. This method saves you from large commissions. It is also possible to transfer money from your account to the account of the creditor bank, or monthly deductions from your salary through the accounting department of the organization in which you work.
Another option for paying a personal loan is remote payment terminals. Payment through such terminals usually arrives at the bank’s account within 24 hours. You can also repay the loan by postal orders, the commission for which is 1% -2%.