The personal loan is a loan that allows you to get money for any purchase need. It is not a finalized financing, therefore it allows you to obtain liquidity to spend in total freedom.
The main characteristics of the personal loan
The personal loan is a type of financing, here are the main features:
- it is provided to private individuals by a bank or financial company;
- the sum received on loan is repaid in monthly installments over a set period of time;
- it is generally a fixed rate and sometimes variable loan that is not finalized.
What are the main types of loan
In addition to personal loans, the main types are:
Assignment of the fifth: granted to public and private employees and pensioners which allows obtaining liquidity repayable in monthly installments which are deducted directly from the salary or pension and which cannot be of an amount greater than one fifth of the net salary or pension;
- Delegated payment loan: granted to public and private employees but not to pensioners. The debt is repaid by paying monthly installments which are deducted from the salary and which cannot be greater than two fifths of the net salary;
- Finalized loan: disbursed by the bank but requested from those who sell a good or service that you intend to purchase by paying in installments;
- Fiduciary loan: it is requested when you need cash urgently. It can be paid to employees, pensioners, self-employed workers and even students. It is a non-finalized loan and is granted to those who demonstrate that they have sufficient economic capacity to repay the debt, but not to bad payers or protesters;
- Mortgage loan: it is intended for homeowners who are over 60 years old. The loan is granted upon registration of a mortgage on the property. The debt must not be repaid until the applicant dies. However, it is possible to repay the loan in installments.
What are the necessary requirements
The requirements for accessing the personal loan may vary from institution to institution but always within the framework of some rules set by the Best Bank:
- aged between 18 and 70 and in particular cases even a little further;
- be able to repay the loan, taking into account all the monthly expenses incurred;
- employees must present the paycheck, the self-employed, the income tax return and the pensioners the pension slip.
The amortization schedule
The calculation of the amortization plan allows you to know the details of the loan. Includes:
- the number of total installments and their composition.
In Italy, the repayment method takes place through the French amortization plan according to which the installments consist of an interest and a capital share. With this type of plan, interest is paid first and then the principal. The first installments consist of a high interest rate which decreases over time and a lower capital rate which, on the contrary, increases as you move forward.
What happens in the event of non-payment of an installment
In the event that you have difficulty paying an installment, you must promptly contact your bank to find the appropriate solution to the problem. In fact, failure to pay one or more installments entails the application of a delay and the reporting of the loan holder to the risk centers, compromising the credit reputation of the loan holder. A bad credit rating may preclude access to other loans.
Early repayment of the personal loan
It is always possible to pay off the loan in advance of the pre-established deadline by paying the amount of the residual debt to the bank or finance company and paying a statutory penalty equal to, at most, 1% of the principal still to be repaid. However, paying off a loan early is not always beneficial.
Withdrawal from the loan agreement
As a result of the law 229/2003 which provides for the possibility of rethinking the consumer, it is possible to withdraw from the loan agreement within 14 days of its signature by sending a registered letter with return receipt to the bank at no additional cost.
Funding evaluation criteria
To determine the final cost of a loan, interest and all ancillary costs related to the loan must be considered, such as:
- the costs of opening and closing the file;
- the preliminary costs;
- the costs of the insurance policy;
- any bank fees.
To evaluate the overall cost of the loan, use the APR, the Annual Global Effective Rate, an index that expresses as a percentage the actual cost of the loan, including interest and charges and ancillary costs.
The insurance policy
Insurance is a form of protection that protects the applicant from the risks of insolvency related to unforeseen events such as death, serious illness, permanent total disability, total temporary disability, hospitalization and loss of work. The cost of the insurance policy must be included in the APR.
Insurance policies on personal loans are optional even if in specific cases, such as an insecure income situation, the bank may make the disbursement conditional on the stipulation of the policy. The law establishes an obligation for the banking institution to offer the customer at least two quotes from insurance companies that cannot be attributed to the institution itself. The consumer has 10 days to evaluate other offers.
The release of the loan
In the event that a loan is denied, the information remains stored in the retro database, the system that manages all credit information, for 30 days. So if you request a loan from another bank before the 30-day period expires, the loan will be automatically rejected.
Therefore, it is good to ask the institution that refused the first loan for a release, that is a declaration containing the reasons for the refusal and wait for the cancellation of the report before submitting a new application.