Payday loans are a very popular and modern solution. People with financial commitments that they cannot cover from their own wallet reach for them. However, many of us are still afraid of taking loans from non-bank institutions. The majority of information on online loans are myths that should be refuted and talk about installment loans as a great way to get out of the budget crisis.
Development of the non-banking sector
In recent years we can observe a huge modernization and automation of our lives. The Internet has dominated the world and nowadays nobody can imagine life without it. The financial sector, which is constantly developing, has not bypassed major changes. Specialists from the FinTech industry are constantly creating newer and newer solutions that certainly help in gaining the trust of customers. On the internet we will find many loan services where we can learn, for example, how to compare loans and choose the best offer for yourself.
Almost every loan company works on the internet. The network gives us the opportunity to verify the credibility of a non-bank institution. Along with the development of the loan industry, there are more and more companies that deal with this type of commitment. In accordance with the principles of safe lending, it should be our responsibility to check the potential lender and ensure that it exists and operates legally.
Installment loan tailored to individual needs
In the case of installment loans, we decide how much we want to borrow and for what period. We also set the date of payment and the amount of its installment. If our creditworthiness will be without complaints, and our demands will not be excessive, there will certainly not be any obstacle on our way that will prevent the finalization of the entire process.
In order for the loan to meet our expectations, it is worth considering what we need additional funds from the commitment for, and then adjust its parameters. How to choose the amount and repayment period? This is a seemingly easy task, but many people have a problem with it. If we do not prepare properly in advance, it can later significantly affect our home budget. In order not to happen, we should carefully analyze our expenses and needs and the monthly free amount from which we will pay the next installments.
No formalities when signing the loan agreement
Another positive feature of online loans, which is inevitably associated with the dynamic development of the non-banking sector, is the lack of bureaucracy that banks do not deny. Borrowing online is a pleasant and simple activity, because we do not have to be particularly prepared for it.
Many of us are certainly aware of the process of granting loans by banks – it is tedious, long and impossible for many. Our negative associations are due to the formalities that need to be done with the last button. The process of collecting a million documents seems to last forever and we associate with very nervous and stressful time. You should also mention customer verification, which takes quite a long time. Maybe it would be worth fighting with numerous difficulties to finally receive the prize in the form of the expected pot of money. However, the granting of loans is low and few people meet the high requirements of banks.
Such complaints resulted in the development of loan companies, whose goal was to minimize all formalities. Currently, the data needed for an installment loan application is scarce, and it takes us a moment to verify us. So we do not waste valuable time visiting various offices in order to obtain the necessary documents and certificates.
Pro-consumer solutions to loan repayment problems
If we have trouble paying back the loan, we should not panic. In such a situation, you should immediately contact the representative of the loan company and inform him about our budget problems. If we do not avoid contact with the lender, we will definitely come to an agreement that will be satisfactory for both parties. By negotiating with the creditor, we build trust, which is an important issue when it comes to our credibility. Non-bank institutions are more willing to reach out to borrowers who care about settling their obligations and who do not wait for payment requests to spill from their mailboxes.
What solutions does the lender offer us in the event of repayment problems? The most common is the proposal to extend the repayment period. It involves extending the period in which we will pay the liability. If we extend the period, the installment will automatically decrease, which should not reduce our portfolio so much. Of course, this involves additional costs, but it will definitely make you feel safe and will not be doomed to monthly stress.
Getting a loan from a non-bank institution, especially one that is very popular among borrowers, is becoming increasingly difficult. This is because loan companies have increasing expectations of customers and are more likely to lend to those who possess the right qualities. What characterizes an ideal financial sector client and can each of us become perfect for his lender?
Know your credit standing
Creditworthiness determines whether we are able to repay the commitment we want to make within a specified period. To a large extent, our credibility, as creditworthiness is also called, decides whether and to what extent the financial institution decides to grant us an online loan. It is determined on the basis of several factors and each lender has its own way of assessing it. Due to such differentiation, situations occur when a client applying for a loan in one institution receives it and in another he is refused.
What determines your creditworthiness? Undoubtedly, income affects her. However, we calm down – it does not have to be tall, but simply solid. The number of people who are dependent on the applicant is also not insignificant. Other obligations we have incurred, such as outstanding loans, credit cards, home appliances or consumer electronics in installments, will also be important for the lender. To never encounter a negative credit decision, it is worth trying to assess it yourself first. If we find out what monthly loan installment we can afford, we will apply for a commitment that will not cause us difficulties and will not jeopardize the household budget.
How to check your presence in debtors’ databases?
Before deciding to take out a loan, make sure you are not on the list of debtors’ databases. The lender will certainly check our presence in some of them. Therefore, it is better to think about it in advance, so as not to be disappointed with a negative decision. We advise on how to control yourself and what debtors’ databases to search.
How to check yourself in KRD?
One of the debtors’ bases to which most loan companies have access is KRD, i.e. the National Debt Register. How to check yourself in KRD? Obtaining information about our presence in this register is free of charge. All we have to do is register to the KRD system. Then – complete the short form, attach a scan of your ID card to confirm your identity and download the report. The obtained document will inform us about the number of liabilities, the number of creditors and the exact debt.
Check the BIG Infomonitor database
The next step should be to check if we are in BIG Infomonitor, because this database is extremely important for lenders. Indicates which potential clients have lost their financial credibility and should not cooperate with them. To verify here, we also need to register on the BIG registry website. The procedure is similar to KRD, with the difference that we can generate a free report once every 6 months. If we want to check our debt more often, we have to pay PLN 6.50 each time.
Report from the ERIF Register of Debtors
Another database from which to download a report about yourself is ERIF. Checking in the ERIF Register of Debtors is analogous to the two previous verifications. The ERIF report will tell us about all debts that may be an obstacle to getting a new commitment. Each responsible borrower checks its presence in various registers. This is a free operation. It is worth doing it at least once every six months to check whether we have missed anything as a result of various commitments. There may have been inaccuracies that will echo our credit history. Therefore, reports of debtors’ databases should be systematically monitored.
Trouble paying your debt? Not for a reasonable customer
The ideal customer of a non-bank institution does not delay paying the installments. There are no problems with paying off the debt, because his decision on debt was aware and responsible, and thus adapted to the needs and possibilities. Choosing the right loan offer pays off in the future and makes repayment of money not a problem for us. If we’ve already learned our credit standing, then let’s not go deep into the water. Do not choose the installment amount, which is unreachable for us and strongly burdening the household budget. It is better to choose a longer loan period and lower monthly installments, but you should be sure that we will be able to pay your debts. Otherwise, solving the problem of late repayment, such as extending the loan, can cost us a lot more and have a negative impact on your credit history.
Financial management – build a positive credit history
Loan companies value clients who manage their finances wisely and have a positive credit history. We can define credit history as the history of our financial activities in the field of taking out and regulating loans or credits. We will learn about the credit history from the debtors’ databases, which will tell us what obligations we incurred and how we dealt with their repayment. Every responsible borrower tries to regularly pay off all debts. The ability to make timely payments gives the lender a signal that we are organized people and we can manage our budget efficiently, so it is worth trusting us and entrusting money.