Consumer loans: what do they consist of?
A consumer loan is a very comfortable form of financing for the consumer, since it allows you to acquire a good in installments (for example, furniture or appliances) that you can face in a much more accessible way than if you had to pay the full amount of a time. In addition to this modality, and as established by Law 16/2011, of June 24, on Consumer Credit Contracts, those consisting of a loan, opening of credit or any equivalent means are also included within this type of credit. of financing ‘. The fundamental difference of this type of loans with mortgages is that the guarantee of that loan is the current and future assets of the person who receives them, instead of the real estate that is mortgaged.
Origin of consumer credit
Although it seems that deferring purchases or having cash to deal with an unforeseen event is something relatively new, it is not so much: in Spain, term purchases meant a revolution in Spanish homes in the second half of last century, especially as a result of the popularization of the “utility” car, and the first credit card was issued in 1978. However, consumer credit as such was born in the fifteenth century, in northern Italy. The Franciscan friars promoted this form of financing to face the abusive conditions characteristic of the lenders of the time. Therefore, these friars promoted a series of interest-free loans – albeit with a pledge guarantee – with a solidary purpose. The interest payment arose in 1515:
Today, consumer credit takes new forms, such as revolving credits – those in which the amount initially granted is restored once the part that has been used is paid – or the different types of credit cards that exist in the present. Of course, so that it can be considered as such, according to the Bank of Spain, the amount financed must be at least 200 dollars .
Advantages of applying for consumer loans online
At present, the conditions do not usually vary if the loan is requested online with respect to the traditional process that begins when we go to the office of our usual bank or cashier; Moreover, some entities that operate solely on the Internet offer better conditions than traditional banking. Also, although there are still many people reluctant to process documentation online, the truth is that this route greatly speeds up the process, since the entity receives the necessary documents to start the financial study practically in real time. It should also be borne in mind that security and technology have evolved greatly, so that companies can offer all guarantees regarding the security and confidentiality of documents sent over the Internet.
Another of the strengths of using the networks is the possibility of comparing consumer loans online in a web comparator, selecting the one that best suits our circumstances or suits us, and start the application instantly directly from the web of the comparator, which redirects to that of the corresponding entity. This saves us multiple visits to the different bank offices and may even make us aware of an entity that we might not have considered in other circumstances. That is why, today, we no longer have to fear the Internet, since technology has greatly improved in every way.
Consumer loans in Spain
Although almost all Spanish banking entities have consumer loans within their commercial offer, the requirements they impose can vary significantly. Typically, the payroll is domiciled at the bank where the loan is being requested; In addition, that payroll should amount to a minimum amount (normally, between 900 and 1200 dollars ). In turn, it is likely that insurance or at least one credit card must be contracted – and used a certain number of times or for a specific amount. Special attention should be paid to the APR (Annual Equivalent Rate), especially if the conditions of several loans are to be compared, since it is the one that includes the nominal interest rate, expenses, commissions,The application of fees and interest rates will depend not only on the bank, but also on the financial situation of the applicant.
In Spain, consumer loans are going through a golden moment, although in recent months their demand has decreased slightly. One of the most likely reasons is that banks and savings banks perceive a greater risk and therefore have hardened the requirements to access them. However, some experts also argue that companies that lend money online as the main activity offer better and better conditions and their requirements are not as demanding as those of traditional banking. For example, in the case of Whiteline Credit, just show that you have monthly income, are of legal age and have not been included in any list of delinquents. It is not necessary to hire additional products or domicile anything to qualify for these loans.
However, the bank is aware that the profit margins they achieve with loans are not negligible, so, especially in times where consumption skyrockets, these credits are still the most accessible option to finance our purchases or projects.