Personal financing is the order of the day nowadays as it is used to purchase any good or service, from the telephone to the honeymoon. Even online shops allow you to take out small loans to pay for an online purchase and therefore have become the norm. Since the world of loans is very complex, we will try to deepen by giving you the basic information to understand how to extricate yourself between rates, taxes and costs multi-family lending.
The purpose of the loan
Personal financing is a loan of a sum of money that you can use freely, sometimes without the need to justify the expense at the institution that provides it. For this reason, before explaining everything you need to know about personal loans, we would like to focus on the two macro-types from which all the formulas you may have access to branch off: finalized and non-finalized loans.
When you find this wording you are specifying the possibility or not of not having to account for the purchase or expense that you will make with the money lent. Specifically, a finalized loan is the one that is taken out at retailers of goods and services to pay off the purchase cost in installments.
The credit institution issues a commission to the seller for having procured a customer and the amount is not paid to the customer but to the shopkeeper. In this case it is obvious that the lender is aware of the good or service you wish to purchase with the loan.
In the case of non-finalized loans , however, these can be accessed at any bank or financial institution. The payment is made directly to the applicant by check or credit to the account . The sum received is used at the debtor’s discretion and, therefore, there is no need for specific reasons to be attached to the request. This is a type of loan that is not subject to the purchase of a good or service.
Personal financing: what requirements are needed
To apply for a loan, a series of requirements are necessary , including an age between 18 and 70, a demonstrable income and the ownership of a regular bank account. Sometimes there are also personal loan formulas for those over 70 but this depends on the offers of the various institutions on the market.
Then there are other requirements that we could define as “internal” and which concern the ways in which credit institutions determine the possibility of insolvency with respect to the customer’s status. Banks and credit institutions operate through automated systems that calculate a sort of “credit scoring”. This is the credit score that statistically analyzes the customer’s creditworthiness level.