All the information about Personal Loans
Personal loans, as the name suggests, are those that the bank grants based on the name and creditworthiness of the person. In other words, other real guarantees are not committed, such as in the case of mortgage loans (a property, flats, houses or premises is mortgaged) or in the car loan with reservation of title (the vehicle itself is left as collateral).
Characteristics of personal loans
- The amount of personal loans usually have a limited amount whose most usual amount is a maximum of 60,000 us dollars and a minimum of 3,000 us dollars.
- The term in months to repay the loan is usually a maximum of 10 years, although it is normal for them to be for a term of 60 months. Everything will depend on the quantity.
- They are granted with the guarantee of the person who will have to justify sufficient income to pay the monthly fee. For this reason, the payroll and the income statement are always requested, showing what is earned.
- Applicants who have other previous debts registered that can be verified in the RAI and in the.
- The application for personal loans can be done all online on the banks' websites and send the necessary documents by mail or scanned to the address indicated by the bank. They are Online Personal Loans.
- Generally, they are personal loans without endorsement or other guarantees only with payroll or pension, except for exceptions due to job instability or other solvency reasons.
Financial Companies that grant Personal Loans
Today it is not necessary to ask for a loan in banks and Savings Banks. There are several ways to request money through personal loans:
- The most traditional way going to a bank office and asking for the Director or the manager of credits and loans.
- Apply for financing in the same banks but online. With the birth of the internet, all the processing can be done online and lately from the different bank applications.
- Ask for money on web platforms that mediate or connect individuals who offer money in exchange for a return with people who need financing. What is known as landkending.
- Private lenders or private loans. In general, these require mortgage guarantee and lenders have been reported offering operations of questionable legality.
Main banks that offer personal loans:
How to Request Personal Loans Online
We have already indicated that the traditional way of requesting a loan is to visit a physical office and speak with the person in charge of financing. However, all this has now been facilitated and can be done online:
- In the first place, access the website of the financial institution and enter the loans section looking for the tab in its directory that is usually quite easy to locate.
- On the first screen they always offer us a loan simulator to make our own calculations and choose the amount and term to repay.
- Once the amount and the term have been selected, we are invited to enter personal data, name, surname, address, etc. and the financial data of what you earn and the most important expenses, especially payments of other loans.
- Then the Bank or Finance will give us a more or less quick answer. In the case of financial companies, you will have an answer instantly.
- If the answer is positive, granting the loan, you will have to send the requested documents and the bank sends us the contract model. We proceed to the signing of the contract that we return to the entity who transfers the cash to us.
Personal Loan Simulator
There are multiple loan installment calculators on the internet and therefore, it is relatively easy to be well informed of how much we will pay for the credit and what amount can be requested.
It is important to know this information before visiting the bank or applying online. Knowing the bill to pay, we can compare with the one offered by the bank and discover if it is putting other expenses in the calculation.
On the other hand, if we take into account that the bank grants the loan when the monthly bill is not more than 35% of the net income, we will know in advance what response the bank can give us.
Here you can calculate how much you would pay for your Credit:
Expenses that a personal loan has
In loans, it is not only enough to pay the interest. They always carry a series of expenses.
- The commissions charged by the bank: Opening commission between 0.5% and 2%. Commission for early amortization: 0.50% of the amount paid.
- Commissions for late payment of fees. The bank applies a commission for each installment that is claimed apart from the default interest.
- Notary fees. If the operation is intervened before a notary public, there are expenses that the notary himself receives. However, many personal loans are contracted without such intervention.
- Other expenses for related products that the bank requires to grant the loan such as insurance, cards, pension plans, etc.
- The interest rate in APR informs of all the expenses that the credit carries.
The best way to know all the expenses that the loan includes is to look at the interest rate offered by the bank and compare it with the APR.
Requirements that Banks Ask for Personal Loans
The requirements to meet when requesting a personal loan from the bank are similar in all entities. Some of them to comply with the law:
- Obviously they are granted to natural persons. Including freelancers, not companies.
- Be of age. However, they usually limit it between 21 and 70 years.
- Resident in United States. Spanish with DNI or foreigner with authorized resident card.
- Show recurring income. Especially and easier when you have a salary or pension.
- Not be in delinquent records, RAI, Credit Checker, etc.
Documents To request personal loans
Although the bank can always ask for a special or specific document to justify income or economic situation, the usual ones are the following:
- Copy of the Identity document - DNI or Resident Card
- Copy of the latest payroll
- Work contract and working life in the case of temporary work.
- Income Statement or IRPF. If not required, income certificate.
- In some cases, proof of where the money is going (buying a car, buying furniture, renovations, etc.).
- Last bank account movements with income and expenses.
- In the case of Self-Employed, Receipt of the Social Security fee, quarterly VAT returns and personal income tax.
Personal loans without payroll or endorsement
Requesting a personal loan with a fixed payroll domiciled in a bank and with a sufficient salary to pay the installment that does not exceed 35% of net income, is the best way to ensure that the bank will grant the loan.
However, it is possible to get a loan without a payroll showing that you have enough income to pay the monthly payment or that we have some amount pending collection as long as we can provide reliable documentation of the security in the collection.
For example, if we have a debt pending collection or we are pending compensation or we have savings in the bank such as a fixed term, investment funds or pension plans.
In the case of online financial companies, it is easier to request fast loans online without payroll or endorsement and they even grant the money while collecting unemployment.
Personal loans being in Credit Checker
When a bank analyzes the granting of a loan, its main tool is consulting the defaulter registry.
Therefore, being in Credit Checker, it is very difficult to obtain Credit Checker personal loans and they may not analyze more data and ask for the unpaid debt to be clarified or justified or the operation is not accepted.
However, if the unpaid debt in Credit Checker is small and the reason or reason is not important, the entry in Credit Checker may be ignored as long as the other data and income is positive.
A different case would be Quick Loans with Credit Checker in online financial companies where delinquency is less verified given the high interest rate they charge and as they are mini-credits.
Being in Credit Checker may be reason enough for the bank not to accept to grant credits and loans.
What Happens if I Don't Pay a Loan
When we decide to borrow money from the bank , it is convenient to measure the forces and analyze if we can pay the committed installments and within the established term or due date of the loan. The bank or finance company that grants us the money already takes care of itself to analyze whether, based on the data and documents that we provide, we have sufficient capacity to repay the borrowed capital.
But, what happens if despite measuring our strength and the bank having taken all the precautions, an unforeseen event arises and we cannot face the letters of the loan:
Steps that the bank follows in case of non-payment
- At the first installment or letter that we stop paying, the bank sends us a claim letter asking us to enter it (banks usually include a commission called a claim for debit positions in case they have to claim a delay from us and the The interest charged to us becomes much higher because it is an overdue debt and known as default interest ).
- If we proceed to pay the outstanding installment, the loan returns to a normal situation and the interests are agreed upon, but if we continue without paying the bill and the next month arrives, the bank again reminds us of its non-payment by charging a new commission on debtor positions.
- Arrived non-payment of the third installment is when things get complicated and the bank gets more nervous given that according to the regulations of the Bank of United States, it must provision a part of the loan which means losses for the bank since said money destined You cannot get a return on the provision, that is, you have to make a deposit at zero rate.
If we do not settle the outstanding debt and neither do we offer the bank a credible way out to pay in a short term, the usual thing is that the bank asks the Notary Public to certify the total debt of the loan plus the default interest and once certified, file a lawsuit execution of in court for non-payment of the loan
From that moment on, the loan is completely overdue, since this is usually agreed in the loan contracts and it would no longer be enough to pay the outstanding installments, unless the bank agreed.
After the lawsuit is filed and accepted by the Judge, accepting the debt that the bank claims, it goes on to request the seizure of the assets, if any, as well as seizure of the payroll and other income until the total debt is settled plus the interests.
If there is a guarantor in the operation, the bank will also initiate actions against the guarantor.
To bear in mind that the bank will not be able to seize from the payroll the amount that by law marks for the Interprofessional Minimum Salary (currently at 648 us dollars). Of the rest of the payroll, certain percentages can be seized and according to a scale of amounts from lower to higher.
In summary, if you stop paying a loan and have no assets, the greatest damage will be that your payroll is seized, but taking into account what has been said that you cannot be seized the amount corresponding to the Minimum Interprofessional Salary. If you have a flat, a car or any other property, in that case your assets would go up for auction by the Court.
As secondary damage, it would become part of the Rai and Credit Checker delinquency records, which would limit you from borrowing money in the future, since banks and finance companies always consult these records before granting loans. However, these annotations have an expiration time by law in the official data to the public, although banks usually keep said data in their records