The content of the article
- What is lending to individuals
- Inappropriate loans
- Lending principles
- Loans to individuals – classification
- By maturity
- By nature of loan security
- By duration
- Types of loans for individuals
- Cash loan
- Mortgage loan for individuals
- Credit cards
- Features of lending to individuals by commercial banks
- Assessment of solvency of the borrower
- Lender requirements for a borrower
- How to get a loan to an individual at a bank
- What documents are needed for registration
- Lending terms
- Bank interest rates on loans to individuals
- Amount and loan term
- Interest Calculation Procedure
- Additional commissions and payments
- Which bank is better to take a loan
- Cheap loans to individuals
- Favorable loans in Moscow banks
The prospect of becoming the owner of a new car, apartment or TV, even with a modest income in modern economic realities, is not so illusory. There is no need to save money for years to make a dream a reality. You need to contact any of the banking institutions in Moscow or another city and, subject to certain conditions, receive money at interest in cash or on a card. In order to lend to individuals, banks have developed a lot of profitable offers, which allows ordinary citizens to take money for consumer needs.
What is lending to individuals
When analyzing a portfolio of loans to individuals, mortgage, consumer and car loans are considered. Banks make a profit by giving money to citizens at interest. Consumer lending – a banking operation for customer service, which makes it possible to get money in debt on certain conditions. Depending on the institution, they may vary significantly, but they have the main condition – you need to return the money in a strictly agreed period, and pay a certain amount for using them.
If you don’t have enough funds to implement a specific idea, you can apply for a targeted loan. This can be car loans, mortgages, debt refinancing, etc. Targeted bank loans to individuals mean reporting on the funds spent, and lenders strictly monitor the implementation of this clause of the contract. In violation of the borrower’s agreement, large penalties await.
If there is no desire to report to the creditor, it is easier to take a standard consumer loan. This money can be used for any needs, including large purchases. Such loans are issued for a short period of time, and the amount of borrowing will be small. If you provide security, you can count not only on favorable conditions, but also a lot of money.
Private lending is based on certain principles, the observance of which is mandatory:
- Returnability. Borrowed funds must be repaid.
- Urgency. Each loan has a specific term, which is specified in the bank loan agreement.
- Paid. The function is that for the use of borrowed funds it is necessary to pay a fee, the calculation mechanism of which is determined by the contract.
- Security. As a guarantee of repayment of a loan, a credit institution may require the provision of collateral from the borrower.
- Intended use. According to the contract, credit facilities should be defined.
- Differentiation. For a certain category of borrowers (pensioners, payroll clients, etc.), special lending conditions are established..
Loans to individuals – classification
For ordinary citizens, the lending process offers great opportunities. For convenience, financial institutions have developed a large number of products. They are able to meet the needs of any categories of borrowers. There are various classifications of bank loans, but among the main features it is worth highlighting the following:
- delivery method;
If you consider bank loan programs, you can make sure that the money is issued for a different duration of time. Depending on this, there is a conditional classification of consumer loans, and in the Russian banking sector and abroad the framework by which the border is determined varies. All loans are divided into:
- short term;
- long term.
By nature of loan security
All loans are divided into:
In the first case, loans are issued exclusively with collateral, where movable and immovable property, guarantee agreement on the obligations of the borrower, securities, etc. are the pledged object. This approach helps minimize credit risk factors. Secured loans are usually granted on more favorable terms than unsecured loans..
According to the information provided on the websites of credit organizations, you can see that up to 5-10 working days are allocated for consideration of the application, if the issue relates to consumer lending. Among all the products you can find those whose decision is made on the day of treatment, and sometimes even after a few minutes. In this regard, distinguish:
- ordinary loans;
- express loans.
Types of loans for individuals
For residents of Moscow, different types of loans are available. In the first place in popularity are consumer loans, but in addition to them, banks also offer mortgage lending – money for the purchase or construction of real estate. In addition, private clients have the right to choose how they want to receive funds – in cash, to a card or bank account. For this reason, before you take a loan, you must carefully study all the offers.
Consumer loan market – a segment of the financial market, which includes the issuance by banks of consumer loans themselves, express loans and retail lending at retail outlets. They are provided to individuals in cash or by card. There is also the option of transferring funds directly to the seller. The loan term varies from several months to several days. The amount of consumer loans is small, but there is always the opportunity to increase them if you provide a guarantee.
In the structure of loan portfolios of banks you can find offers in the form of cash loans. Such products are in demand among the population. Before applying for a loan, it is necessary to clarify whether the financial institution does not charge extra money for the issue of cash from the cash desk. Commission, as a rule, is a certain percentage of the amount issued.
Mortgage loan for individuals
Those who want to solve their housing problems can apply for a mortgage loan. It is provided to individuals in exchange for registration of the acquired property as collateral. Immediately you need to be prepared for the fact that the bank will not lend the full cost of housing, so you will have to find some of the money yourself. This is usually not less than 10%.
Sometimes you can count on a loan in the amount of 100% of the cost of housing. Such proposals are found with lenders if they cooperate with construction organizations. A prerequisite for a housing mortgage program is insurance of property transferred on bail. In addition, you will have to independently evaluate the property acquired in the secondary market.
Lending to individuals using bank cards has been particularly popular lately. Convenience lies in the fact that money is always at hand, and you can pay with plastic not only in Russia, but also abroad, without resorting to foreign exchange transactions. Credit cards can be renewable or not. The first option is preferable, since when repaying part of the main debt, you can use the same money again.
A separate market segment is occupied by microloans. In this case, the lender is microfinance organizations licensed to carry out the lending process for individuals. Money is mainly offered for a short period (maximum month). The daily interest rate ranges from 1-2%, and the maximum amount of debt rarely exceeds 30,000 p. The advantage of microcrediting is that a minimum of requirements is presented to customers, and loans to individuals are drawn up without income certificates, collateral and sureties.
Features of lending to individuals by commercial banks
Banks put forward a number of conditions, the implementation of which, although it does not give a 100% guarantee of obtaining a loan, but increases the chances of a positive outcome. To apply for a loan, you will have to provide the bank with a passport, and in some cases, a salary certificate as confirmation of solvency. Warrants may be needed, which are individuals, or other security. In addition, the borrower’s creditworthiness is checked, which helps to assess the risk of timely loan defaults..
Assessment of solvency of the borrower
After submitting the documents, the bank proceeds to a thorough review and evaluation of the applicant as a potential borrower. For this, underwriting is applied – an analysis of the creditworthiness of an individual. This is a technique that helps assess whether the borrower is able to repay the requested money to the lender. Thanks to it, the borrowers are classified as “good” and “bad”. In addition, the solvency of guarantors is checked, if any..
Lender requirements for a borrower
An ideal paying client for a bank is a citizen of 30–45 years old who works on a permanent place and has a family, children, an apartment, and a car. However, in reality there are very few such individual borrowers, therefore, the requirements of lenders are more extensive. It should immediately be noted that each financial institution has its own lending criteria, but in most cases they are as follows:
- citizenship of the Russian Federation;
- age – 18–65 years;
- permanent place of work;
- registration in the region.
How to get a loan to an individual at a bank
If you are planning to request money from a credit institution, you should be prepared for the fact that you will have to perform a number of actions. To begin with, it is worth examining the available offers and choosing the best option. All stages of the lending process are reduced to the following actions:
- On the lender’s website or through a visit to the bank, leave a request. It will be necessary to fill in personal data, indicate the required amount and name of the loan product.
- Wait for a response from the bank, and then provide the required package of documents.
- When approving a loan, come to the department to sign the contract and get a bank card or cash.
What documents are needed for registration
Lending to individuals requires the provision of a passport. Foreign citizens permanently residing in the territory of Russia are allowed to present a residence permit. Sometimes they may be asked to provide a second document, for example, a driver’s license or military ID. In addition, a salary certificate and a copy of the work book may be requested..
Depending on the selected loan product, the terms of the loan will vary. This affects not only the terms of repayment of the loan, interest rates and the amount, but also additional conditions, such as the method of providing money, the method of paying off debts and the presence of various commissions and payments. All these positions are specified in the banking service agreement, which is signed in two copies – for each of the parties.
Bank interest rates on loans to individuals
Lending to individuals is beneficial to banks, as the borrower must pay interest, which is expressed by the interest rate. Its value depends on a number of parameters, therefore, even in the same bank you can find products for which rates can radically differ. The highest interest rates will be loans issued without income certificates, the availability of surety and registration of collateral.
Amount and loan term
Depending on the solvency of the entity, the lenders calculate the possible loan amount. Ideally, it is believed that the monthly payment of debt should be no more than half of the borrower’s income. The timing of the provision of money depends on the selected product, but, as a rule, lenders are not against early repayment of loans, although you need to find out directly at the bank.
Interest Calculation Procedure
To accrue interest in the process of lending to individuals, two systems are used: annuity and differentiated. The first difference is that monthly contributions are calculated according to a special formula and have a single value. An annuity is suitable for large loans issued over a long period. With a differentiated approach, interest is accrued on the balance of the debt, so the amount of the contribution decreases each time.
Additional commissions and payments
When reading a loan agreement, you should pay attention to such points as additional fees, for example, SMS notification or Internet banking. All of them are optional, so the client has the right to refuse them. The same goes for voluntary insurance. The only case when lending to individuals involves the purchase of a policy is property insurance, which is pledged (market of the mortgage lending sector).
Which bank is better to take a loan
Today it will not be difficult to choose the optimal product for the parameters that will satisfy all the needs of the borrower. For convenience, banks post credit calculators on their official pages on the Internet, with which you can calculate upcoming payments online by filling in only a few required fields. The main criteria that are important to pay attention to when choosing a lender:
- financial stability and reliability;
- number of branches and ATMs;
- reputation and rating;
- online technology and mode of operation;
- employee literacy.
Cheap loans to individuals
In order to attract new customers, banks offer advantageous offers, which are in reduced interest rates. This can be both one-time stocks and permanent conditions, for example, for regular or payroll clients. Among the banks offering to use the money at a small percentage, it can be noted:
- Renaissance Credit;
- Alfa Bank;
- Bank of Moscow.
Favorable loans in Moscow banks
Each person has his own concept of how beneficial is lending to individuals. For some, a long loan term and a small monthly fee are important, while the other will only consider the interest rate. One of the important parameters when choosing a bank is also the time spent reviewing the application and the need to provide a large number of documents. It is beneficial to take a loan today at the following banks:
- OTP Bank;
- Orient Express Bank;