Only a few hours ago we proposed the decalogue drawn up between Credit Good Capital and 12 Consumer Associations to explain to customers all there is to know about personal loans. Here it is below.
What is personal loan?
It is a form of private financing provided by a bank or by a specialized financial institution, through which the customer receives a sum of money and undertakes to return it in installments within a predetermined period.
What requirements must be met in order to receive a personal loan?
Normally it can be requested by anyone aged between 18 and 70 and is granted to those who have a “repayment capacity” that takes into account all monthly payment commitments (rent, bills, installments of other loans). This “repayment capacity” must be demonstrated by showing the paycheck in the case of an employee, the tax return in the case of a self-employed worker and the pension slip for pensioners.
In what cases is the personal loan refused?
The disbursement of a personal loan is refused when the documentation shows an insufficient “repayment capacity” of the applicant. The loan is refused if the applicant has other loan agreements in place which, in addition to the loan requested, would commit more than a third of the income.
What to do before applying for a loan?
Before signing a personal loan request, it is good to evaluate several offers and carefully choose the most convenient one according to your needs.
What should a personal loan contract contain?
The exact indication of the sum and the ways in which it will be paid; the interest rate applied; the specific indication of the APR; any modalities for changing the cost of the contract (costs and commissions); all costs that must be incurred (preliminary and ancillary costs such as periodic reporting costs, any insurance costs and costs related to late payments); the amount of the installments and their due dates; an indication of any guarantees and insurance required.
What is Taeg?
The APR – Annual Global Effective Rate – constitutes the actual cost of the loan that the customer must pay to the lender expressed in percentage terms. It is the cost indicator which includes interest, costs and ancillary charges.
What happens if one or more installments are not paid?
There are important consequences: the interest due is increased with the application of a late payment (further interest) and the holder of the loan is reported to the credit protection bodies (risk centers, databases), who share the information with the entire banking and financial system. This report, which compromises the customer’s credit reputation, is communicated in advance by the lender.
Can we withdraw from the contract?
Yes. The right of withdrawal is the right to “rethink” granted to the consumer to terminate the loan agreement without the consent of the bank or the lending financial intermediary. It is without costs and without obligation to provide explanations. Within 14 days from the conclusion of the contract, the consumer who intends to withdraw must send a communication to the issuing body following the procedures indicated in the contract.
Is it possible to pay off a personal loan early?
The legislation states that it is always possible to pay off the loan in advance of the agreed term, both partially and totally. The customer who chooses to exercise this option must repay the remaining capital due to the bank / intermediary, the interest accrued at the time of extinction and any other sum for which the bank was in credit.
Are there forms of protection covering unforeseeable events?
Yes. The most common form is the stipulation of “credit protection insurance” insurance policies that protect the applicant and his family against multiple events that can lead to negative financial situations and provides specific protections in cases of: death, total permanent disability, temporary total disability, hospitalization, serious illness and loss of employment.