Cash needs can arise at the worst moment. It is necessary to take out a cash loan as soon as possible on favorable terms. And then the question arises: “Where to go?” Bank or microfinance institute (MFI)? In terms of benefits the bank and as soon as possible the MFIs.
When you apply for a loan from a bank, the prospective borrower must provide a package of documents. The more documents a borrower can provide to the bank to confirm their wealth status, the lower the annual interest rate will be, and on the contrary, the loan amount will increase.
What do you need?
The package consists of:
- proof of identity.
- Compulsory health insurance.
- Rights or registration certificates of the vehicle
- Passport, it is desirable that there be passport control stamps indicating a trip abroad in the past 6 months
- Inquiries in a real job about income of the past 12 months, confirmed by the seal of the head of the organization and the signature.
- Copies of all pages of the workbook or other documents that can confirm employment. This can be an extract from the workbook or a certificate signed by the head of the organization that contains information about the employee: his position and work experience. Or a copy of the employment contract. All document pages must contain the seal and the signature of the header. The tenure from the current job should be 6 months and the work experience should be at least 12 months.
- Certificate of registration with the tax office (TIN).
To get a cash advance from a bank, you may need additional documents:
- a military ID card (for people who have not reached the age of 27) and, in the event of their absence – documents that can confirm the existence of a deferral from military service
- the original and a copy of the marriage or divorce certificate
- A copy of the certificate confirming ownership of the immovable property.
Taking out a cash loan in 2016, the beneficiary must choose a bank with the most attractive interest rates. The interest rate for consumer loans is between 22 and 38%, the mortgage between 11.9 and 18.8% and the car loan will be between 18 and 24%.
The document package presented by the borrower will be checked by the bank security service within 2-12 working days. A bank employee then informs the potential beneficiary by making a decision. The borrower can pay a loan of 1 to 3 years based on the loan amount and the interest related to it.
Virtually every borrower who has a full order credit history can expect to get the maximum possible loan. The amount of access depends on the borrower’s monthly income and expenses and the type of security he can provide.
When the bank needs a complex set of documents
When the borrower is forced to collect a large number of inquiries and make large copies of different documents, borrowing documents is not necessary to borrow money from an MFI. And with time everything will be solved faster. The only downside is that even if the borrower collects a large number of documents that confirm their profitability, the interest rate is even higher than that of the bank. In addition, the loan amount is limited, especially when the borrower makes an application for the first time. And the loan amount is only spent in rubles.
The list of documents to be applied for is very short and consists of only one element – an identification document.
It is possible that the borrower will be asked to submit a second document. Here, however, he can choose from the list offered by the lender.
Interest is paid on the cash loan provided depending on which microfinance organization the borrower works with. The minimum interest rate for first-time applicants is between 0.8 and 2% per day. The annual percentage varies accordingly: from 292 to 730%.
The borrower is obliged to return the amount received in a relatively short time: from several weeks to six months.
If a borrower does not apply to an MFI for the first time, you can expect to get a loan and other more favorable terms. The re-lending is characterized by a reduced interest rate that decreases almost twice. The borrower can also expect an increase in the loan amount. This is how the company tries not to lose a single customer. Psychology works here – in this MFI, they are considered a serious and positive customer when they lend money on loans and offer bonuses. So why should we search better?
Another way to get a loan is by using a credit card. According to statistics, a credit card uses more than a third of the population of Russia.
What is required for registration?
To get a credit card, you need to do so. Collect identical documents to a consumer loan. A large credit limit should not be waived when processing credit cards for the first time. If the borrower responsibly pays the monthly debt and actively uses the card, their credit threshold will increase. You should not withdraw cash from a credit card. First, it is not welcomed by the banking system, and second, the fee for issuing cash from a credit card can reach a threshold of 5% of the amount spent. And sometimes the commission can exceed the amount of money spent.
Interest, return period and other expenses
Making a credit card to get a cash advance does not take much time: from 1 to 7 working days. Sometimes the borrower doesn’t have to go to the bank to get it – the courier service delivers the credit card to your home.
The average lifespan of a credit card is 3 years. Maintenance must be paid annually. The amount is calculated on the basis of the card type: Maestro or Visa, depending on the credit card limit, plus the costs incurred by the bank in the bank branch. The monthly payment of the loan is 5% of the credit limit.
Choosing the right place to lend is the prerogative of every citizen. You should properly assess your financial opportunities, plan your earnings and expenses, avoid rush expenses to repay your debts on time, and not worsen your credit rating.