A loan consists of the delivery of an amount of money at a certain time, the debtor committing to return the requested capital plus an additional bonus for the use of that money at that time. PaydayLoanHelpers helps you get the online loan you need. The total borrowed capital is usually returned at several future times. The periods in which it is returned usually change according to the amount thereof.
The share of a loan is composed of capital plus interest agreed plus expenses included in the loan. There are several forms of amortization of the capital requested in a loan, among which we can mention:
- French system: This system of capital amortization consists in the fact that the installments to be repaid are constant so that the interests are decreasing and the amortization is increasing as the life of the loan advances. The interest in this system is calculated on the debt balance. This system is the most used by banks.
- German system: This system has a decreasing share since the amortization is constant and the interest when calculated in the same way as the previous one decreases as time passes.
- American system: This system pays only monthly interest for what is usually very small monthly installments compared to the previous systems and the return of the capital is made in full in the last installment. In this case, the fee is constant since the interest is on balance of debt or capital of origin (which in this case are the same as capital is not returned until the last installment). This amortization system is usually used for goods that usually have an extensive construction process and the term usually covers this process, so that in the payment of the last installment the said good is generating income.
- Direct rate: This amortization system has the characteristic that both the quota and the interest are constant since the capital is amortized proportionally in each of the installments and the interest is on the capital of origin, so as in the previous case are constant.
It is well known that there are different types of loans. The main types of loans are:
- Mortgage loans: they require the guarantee of a person, but they also take a mortgage on real estate; If the loan is not paid, the property is transferred to the lender or the financial entity that granted the mortgage.
- Personal loans: are sums of money – in general small – that are requested for specific destinations (eg holidays, start a business, change the car).
- Study loans: they are little known in Latin America, but in the United States and England they are widely used; they are loans that are requested to finance higher education.
- Loans Pledge: The loan guarantee, in this case, is made on a car, this guarantee is generally used when debts are generated for the specific purpose of the purchase of the same.
- Loans with a real guarantee: In this case, the guarantee is constituted on some personal property that is the property of the insured. In these cases, the main purpose of the same is to guarantee the payment of the same as a consequence of the debt generated by the purchase of said good. It is generally used for the purchase of machinery, or production goods, although this is being disused due to the generalization of leasing.
- Consumer loans: finance the purchase of goods for consumption; Credit cards are the best example of this type of loan.
The forms of applying for a loan vary depending on the type of loan you want to apply for and to which entity it will be requested.
The banks have strict conditions that the client must comply without exception to access a loan. In this case, it is essential to go to the financial institution in question and find out very well what are the conditions for the loans and what interest rates are applied.
Currently, it is common to find companies that offer “single-signature” loans or presenting only the identity document. It is necessary to be careful in these cases and internalize very well about the agreement since the interest rates in these cases are usually significantly higher compared to personal loans in which a study is carried out on the credit quality of the applicant.
This type of loan is usually requested by people who for some reason do not have access to credit due to poor management of their finances.
In many cases, financial institutions ask for a loan application that will be essential when determining whether they will approve it or not. For example, if you need money to set up a business or a business, you should write a loan application that contains the following information:
- Description of the business to be assembled, with as much detail as possible.
- In the case of already assembled businesses, specify their seniority, the number of employees and current assets.
- The legal structure of the business.
- A clear description of the products or services you will offer.
- In case of already assembled businesses, financial status, and average monthly income.
- Personal financial statements of the owner or business owners.
- Collateral (endorsement) that I would put as collateral.
After submitting the loan request, the financial institution carries out a study taking into account the applicant’s ability to pay, the risk of the activity, the economic and financial situation of the company or the person, the guarantees presented, the credit history of the applicant, among other data that serve the same to minimize the risk of default and cessation of payment. The bank can also request information related to guarantees, whether real, pledge or mortgage. In this case, the applicant must submit all the documentation required by the bank on it. In the event that the guarantee presented is a property, the applicant must present:
- Writing of the property.
- Document of the holder.
- Demonstrate in a reliable way that the property does not have any previous debt.