What are personal loans?
The personal loans are called consumer product to get financing for a sum at an interest rate which must be repaid by installment payment of a fixed duration.
Personal loans are part of a generalized system and everyone uses them to buy any product in installments.
The Personal Loan in general is not finalized and must not necessarily be used to purchase a specific good or service, but lately both banks and financial companies are increasingly orienting themselves to know the reasons and to get hold of the supporting documents the disbursement of the loan itself.
Instead, the loan linked to the purchase of an asset is finalized.
Personal loans: the contract
The personal loan contract legally considers the two main figures: the Bank / Institute that finances and the Applicant (the Client), to which the Guarantor will be added, when the case requires it. When the loan request is approved, the sum will be paid directly into the Client / Applicant’s bank account. The Contract must contain:
- The N. of the contract
- The stipulation date
- the amount paid
- the form of the loan
The number and the amount of the installments (with the date within which each installment must be paid) indicates the interest rate: the TAN, the TEG and the APR (annual percentage rate) the costs and commissions any necessary guarantees the default interest the loan insurance the penalty in the event of early repayment. Institutions providing Personal Loans All Banks and Financial Institutions authorized by the Bank in Italy On the other hand, the loan linked to the purchase of an asset is finalized.
The guarantees for obtaining personal loans
There are cases in which the Applicant for a Personal or Finalized loan is requested, by the Institute to which one has turned to obtain the loan, as guarantee of the loan, the name of a Guarantor / Guarantor.
The reasons for this request can be multiple: age, activity, type of employment contract, residence, layoff, salary, from what is in regular Italy, if it is the first time that it requires a loan, etc..
The figure of the Guarantor must have certain and precise characteristics: he must be a cohabiting family member, must not have negative bank reports and must possess the requisites typical of the applicant for the loan. If he is recognized as suitable, he will sign the contract as “GUARANTEE” of the loan.
It should be noted that in the past, today much less, this term has been used and abused in a thousand ways, deluding people that this signature was not important and that they would be released soon. But this was not the case for many, many cases, in fact: “The Guarantor is to all intents and purposes the jointly liable jointly and if the installments are not paid regularly by the applicant he will himself be required to do so directly. Otherwise he will be reported as a bad payer and cannot be financed for his personal needs. “
On the other hand, the cases in which the Financing Institute requests the issuance by the Applicant of a Bill to cover the disbursed capital are very rare.
Personal loan conditions
The financial assessments take into account not only economic elements, but in particular social aspects that better define the figure of the Applicant for the personal loan. The criteria with which the Banks or financial institutions comply are:
- Financial Historicity: it concerns its economic management, if it has made loans, if it has been good and correct in payments, if the relationship with the current account is fluid and eventful.
- Nationality: if it is Italian it follows a facilitated procedure, if it is foreign the origin is evaluated and above all by what is in regular Italy and if it is in order with the Residence Permit.
- Current economic commitments, Creditworthiness: its current situation and management are considered if it is correct and respects the commitments made regularly. It is useful in the evaluation for new financial commitments or for any consolidation of the loan. Verification of the Central Credit Register.
- Family status: if married with dependents, how many children, if they are rented, etc.
- Residence: if it is stable it is a good index if it continues to change residence is a reason for refusal.
- Income: requests for personal loans are accepted or not on the basis of income and the employment contract, if it is fixed-term the Guarantor is refused or requested.
Amount can be requested
Normally you can apply for personal loans from a minimum of € 2,000 to a maximum of € 40,000. In special cases, much higher amounts can be requested, but in this case special guarantees are required, such as real estate and / or bearer securities. The maximum funding period is 120 months.
The repayment of personal loans is installment with automatic withdrawal on current account, in some cases, now increasingly rare, it is paid by post.
If an installment is not paid:
in the event of failure to pay an installment of current personal loans, the case of default towards the lending institution is verified, with the following risks:
- the unpaid sum is increased with the application of a late payment
- your name is included in the list of bad payers and reported to the credit protection bodies, which will share all the information with the entire banking and financial system. This will cause the credit situation to deteriorate so that in the future it will be more difficult to obtain new personal loans. Even for the sole non-payment of an installment, the lending institution may unilaterally terminate the contract on personal loans.