Happy Loan: the complete guide to personal loans
Today we treat the rules governing a personal loan, and what general conditions it is good to know so that the contract does not reserve unwelcome “surprises”. Each banking group will propose different conditions, but all are subject to common denominators.
Many cornerstones regarding loans and concessions are clearly common, and can not vary, since they are severely regulated by law, to which the Bank must scrupulously comply.
So let’s see in detail which are the pillar conditions that give rise to a happy credit relationship between you and your bank.
When considering more financial offers, it is advisable to evaluate the conditions in detail, without relying on the only criterion of the monthly payment.
The items of expenditure may indeed be numerous and not very understandable (amount disbursed, TAN, APR, interest, accessory charges and insurance): formulating a general budget is not always easy.
Access formulas and general guarantees for personal loans
In the first instance, the presentation of collateral is not always a necessary condition for accessing the loan. If you have a paycheck – and therefore you are able to demonstrate a work regime without interruptions – you will not have to resort to material guarantees. However, in order to limit the risk of insolvency, the lender will present you with a contract that provides for the payment of installments, or encourages you to take out a policy (to protect them).
Attention: the latter correspond to financial products that the bank adopts to protect itself, but which have a considerable cost, and weigh heavily on the overall cost of your funding.
Personal loans usually do not require large forms of collateral.
In case you have to resort to a guarantee, the most widespread method is the intercession of a co-obligor, or a guarantor who, in simple terms, runs the risk for you.
General conditions of personal financial loan
The Law establishes that a contract relating to a personal loan must observe, with utmost clarity for both parties, the following and mandatory conditions:
- report comprehensively the type of loan,
- declare the amount of the loan and the procedures governing its return;
- total amount and cyclicality of the individual installments;
- any necessary guarantees for the returnee;
- annual percentage rate (APR) and analytical conditions according to which it may vary.
Evaluation of your banking profile
When you present yourself to the bank asking for a loan, you must consider some aspects, so as to understand your requirements for access to the loan, and therefore propose a formula suited to your needs. In general, banking institutions evaluate some cornerstones, let’s see them:
- Each bank, in compliance with the draft law, can apply its own risk policy in assessing requests, so that a bank may consider an individual eligible for the loan, while another does not.
- Acceptance of requests is also subject to the assessment of the applicant’s income.
- The creditworthiness of the applicant is of great importance: the institution carries out an estimate of the risk connected to each request, for example by examining the goods offered as collateral, or by taking note of any previous insolvency.
What happens if the contractor does not observe the deadlines?
The suspension of the installment by the financed subject puts him in a state of risk towards the financing institution, exposing him to unpleasant consequences, such as:
- increase in interest;
- risk of reporting to credit protection agencies, who will share information with the entire financial system.
The deterioration of the creditworthiness of the client exposes him to a difficulty in obtaining credit in the future.
- payment of a possible penalty established by the bank, and reported on the contract;
- payment of bank charges and those related to the insolvent customer’s complaint.
Early closure of the personal loan
It is always possible to extinguish the loan in advance of the reported term. But under what conditions? The customer will obviously be required to repay the remaining capital still due, will undergo an increase by means of a penalty, never more than 1% of the total financed.