This article will discuss the different types of personal loans along with their characteristics.Now days, the credit supply for funding is so great that there are many types of personal loans, each with its advantages and disadvantages. They are usually resorted to in times of financial difficulty, but also for a matter of family or personal budget organization. A personal loan can be considered one that a credit institution grants to a private client, that is, not to a company or to a self-employed person, and that the latter can use freely for what he or she considers best, that is, that is not linked to a specific purpose, such as a home mortgage or car financing. For a better understanding, we will include the different types of personal loans depending on who grants them: traditional banks, credit companies, private lenders or public institutions.
Personal loans from banks
It has been said that bank loans are the classic choice for personal loans. Its advantage may be the security and reliability of powerful entities with a lot of financial muscle, which have sufficient funds to carry out an operation of this type. The wide variety of banks and offers from both banks make it possible to compare and find the most advantageous conditions in each case, although in general the interest charged by these entities is relatively high. The most common expenses to which these loans are dedicated are the studies of the children, the family vacations or the private consumption. One of the great disadvantages of this type of personal loan is the great bureaucracy that they carry and the difficulty of accessing them if certain conditions, sometimes very demanding, are not met. For example, many entities do not grant loans to those who do not have a fixed payroll with a medium-high salary, something that in recent years is increasingly unusual.
Certain Debts Make Loan Options Scarce
Typically credit is not approved for those who have outstanding debts, either with the government or with private companies. And for this, not only do they track the lists of defaulters, but they even cover their backs with respect to those who appear reflected in the CIRBE (Risk Information Center of the Bank of Spain), where people with risk credits are registered, even if they religiously comply with the dues payments. In addition to the classic personal loans, which usually grant a specific amount to be repaid, banks currently offer other forms of financing. For example, credit cards, normally associated with the checking account itself. Or lines of credit, which in practice are credit accounts in which the bank contributes a balance and allows the customer to make use of it, but restoring it at the end of the agreed period, plus the interest generated.
Fast Online Micro Credits from Credit Companies
Private credit companies, such as Credy, are companies specialized in granting immediate online loans. It is a very appropriate type of personal loan for unforeseen expenses, since they are fast, easily accessible and the fees charged are moderate. By speed it is understood just 10 or 15 minutes from the moment in which the personal loans are requested until having it at your disposal in your checking account. Simplicity has to do with the application process: an online form for which no knowledge of economics or finance is needed and that can be filled out from the home computer or from the smartphone via the Internet. They are easily accessible because practically anyone of legal age can benefit from them. And that includes the people who are part of files such as ASNEF, RAI or CIRBE, in this way people can access fast loans with ASNEF. In addition, not having a payroll is not a reason for exclusion, since another source of regular income such as pensions or unemployment benefits can be accredited and thus access fast loans without payroll. Finally, the paperwork is minimal because quick loans are made without collateral, as banks do not usually do in many cases.
Other Types of Personal loans: Private Lenders and Institutions
Private lenders also make personal loans legally. They are natural persons who may have a profession completely different from that of finance, but because they have a comfortable economic position they can afford the luxury of granting loans to other people, always through a contract and often before a notary public. The main disadvantage is the very high interest rates, sometimes bordering on usury. Finally, mention can also be made of certain public institutions, whose functions may include granting personal loans. There the ICO could be mentioned, although only in a very specific case: that of financing renovation works in the home itself. The rest of its credits are intended for companies, freelancers and other public institutions.