Loans Between Individuals: What are the Risks and How to Avoid them?

Most of the people in their lives have found themselves in the situation of having to borrow money or lend a sum of money to a friend, a brother, a son or a relative, often without thinking of drafting a contract for better protect yourself.

Technically these cases fall within the definition of “private loan”, which is a legal operation and required by law through the possibility of entering into a specific contract that protects both parties involved. This should make private lending a completely safe transaction, but there are still some risks of private lending that should be taken into consideration before lending or borrowing money from individuals. Helping a friend or a relative in difficulty financially, in fact, is a generous gesture, but must be done consciously to avoid being in an unpleasant situation, especially if the sum lent is considerable.

Risks of loans between individuals: attention to fraud and loot

In the event that you find yourself borrowing money from someone you do not know well or do not know at all, especially if contacted through some website, it is a good idea to pay close attention to the data you provide. to be sure not to entrust sensitive data to unsafe hands.

When there is an urgent need for money, there is also the risk of ending up in bad hands: it is always appropriate to understand who you are applying for a loan and, in case of doubt, prefer a credit institution or a financial institution, which almost surely they will know how to find a solution that’s right for you. A loan contracted with the wrong person, in fact, is often the beginning of a real personal and family tragedy.

Loan between individuals: check the interest rates

Loan between individuals: check the interest rates

When the loan between individuals also provides for the payment of interest, it is good to be informed and check that the proposed interest rate is within the threshold rates set by the Bank of Italy. If the rate is higher you are facing someone who is trying to take advantage of your hard time; that is, to configure itself as a crime of usury.

Loan between individuals: the risk of insolvency

When you need a large or small amount of money to make an urgent source of unexpected expenses, the first thing that often comes to mind is to turn to family or friends. Lending money to a loved one in trouble is undoubtedly an admirable gesture, but what to do in case of insolvency? This situation can lead to the creation of an unpleasant situation in the family or with friends. Also in this case the best solution would be to protect yourself with a written contract valid for all purposes.

Loans between individuals: how to protect yourself?

Loans between individuals: how to protect yourself?

Often, being a loan between friends or relatives, the bureaucratic formalities are neglected, relying solely on an oral guarantee or a handshake. Unfortunately, however, in many cases this way you lose the chance to recover your money in case of insolvency of the debtor.

It is therefore always better to formalize the loan between individuals, to protect both parties involved, with a contract that establishes the terms and times of disbursement and repayment of the loan.

Contract for a loan between individuals: how it should be stipulated

The ways in which a loan can be signed and formalized between individuals also change according to the relationship between the two parties, but in general these three types of stipulations are used:

  • loan with private writing
  • loan with bills
  • social lending through dedicated online platforms

In any case, the contract for a loan between individuals, to be stipulated always in duplicate, should always contain these data:

  • the personal data of the subjects involved: name and surname, date of birth and social security number
  • the amount of the sum paid, clearly written
  • the methods and timing of the repayment of the loan, including any penalties for late payment
  • if foreseen, the interest rate that will be applied
  • the express wording of a loan contract pursuant to art. 1813C.C.
  • the date and the autograph signatures of the parties involved on each page of the contract

If the amount loaned or borrowed is substantial, however, it is advisable to assist an expert and also to use the presence of two witnesses who can sign the contract at the bottom.

Which types for a loan between individuals?

Among the many items to report on the contract stipulated for a loan between individuals, it is also necessary to indicate the type, which can be:

  • fruitful, that is, which provides for an agreed interest rate
  • non-interest bearing, when no interest is expected
  • personal, ie when the beneficiary does not specify the intended use of the loan
  • finalized, when instead a precise use of the sum paid is foreseen.

Loans And Fast Loans Online Without a Payroll

TongaBank Rapid Loans, One of the most Attractive Options of the market

There are hundreds of possibilities when looking for urgent loans or quick loans, but if you want to make the best decision you should analyze not only the final cost but also other important factors. In the balance sheet, TongaBank presents one of the most interesting microcredits available today.

The deadlines and the total cost are important aspects to consider in personal loans, but there are other points to assess, since the conditions and characteristics differ between the different companies and being able to define which is the best quick credit available will always depend on the profile of the client.

TongaBank’s online loans are an outstanding option in the market due to its accessibility, benefits for new clients and an excellent payment term. In addition, this company has a loyalty program that qualifies users according to the fulfillment of dates and other issues, so that you can accumulate points that will be transformed into better future opportunities with larger credits and better conditions.

Attributes of TongaBank’s urgent loans

Attributes of TongaBank

Among the characteristics of TongaBank minicréditos excels a fixed fee of 5 euros for new customers seeking urgent money and a maximum of 300 euros per request. In case of being a client with a history in the company, the maximum reaches 600 euros, One of the strengths of TongaBank in the framework of online microcredits is the time available to the customer to pay the loan, with 60 days to meet the return of cash. This specification doubles the 30-day average offered by most physical and online companies to their customers. In case of not being able to comply with the return of the money in two months, you can request up to two extensions or 15 days with a cost of 15 euros each, so the maximum period can reach 90 days, enough time to meet your payment obligations on a quick credit with these particularities.

Another advantage of TongaBank’s online loans is that if you are a client with a history in the company (that is, from the second quick credit onwards), if you complete the refund of the money before the maximum deadline established, There will be an early amortization that will reduce the total amount since you will only have to pay the percentage interest according to the time elapsed.

Requirements and approval of personal loans from TongaBank

The stipulations of the mini-credits in this company do not differ too much from the industry average. As for documents or personal requirements, these relate to the age of majority, residence in Spain, access to a mobile phone and provision of a bank account and a debit card. If you are looking for one of TongaBank’s quick loans you must show recurring income either through an active labor relationship, a pension or a regular benefit.

As for the people who are on a list of Financial Credit Institutions, there is no predefined parameter on the facilities or determinations that you have for such requests. In practice, TongaBank studies the applications and makes a decision, but does not reveal the reasons for a rejection. The truth is that by meeting the personal requirements and general financial conditions, the company defines and gives you the verdict in a few minutes.

Once you present yourself to TongaBank with the necessary documents and requirements, the entity usually sends you the agreed money in a matter of 15 minutes, so you will have the cash available quickly. If the request is made during the weekend, the delivery time can be extended a little more for technical reasons but never goes beyond 48 hours.

Conclusion on TongaBank mini quick credits

It is often difficult to find a good option when you need urgent money due to an emergency situation, a specific purchase or a quick solution, but in the case of TongaBank you have a very interesting opportunity with a balance between the cost, comfort, flexibility and deadlines, especially for new clients. On the contrary, the lack of clarity about the influence of the Financial Credit Institutions lists reduces the process’s fluidity and clarity.

TongaBank’s online credits are some of the most outstanding products on the market since they present the conditions accurately and honestly without trying to involve users in future problems, besides offering many notable advantages and that their less attractive points are minimal in comparison to the offers of other companies.

As you know, quick loans are a personal decision for specific moments, but TongaBank makes things easier for you with a longer term than the competition, favorable general conditions and a loyalty program that rewards and rewards your clients for future credits with better specifications.

Payday Loans: The Complete Guide

Loans are divided into personal and finalized. While the latter are connected to the purchase of an asset (a house, a property, an appliance), and therefore are requested through the brokerage of the dealer, the real estate agent or the seller affiliated to a credit institution, the former allow to the customer to get a sum, regardless of the use to which it will be destined.

The payday loan, therefore, is based on the direct relationship between the applicant and the bank (or the company that provides loans), and therefore entails greater risks of insolvency, as there is no asset or property that acts as collateral or that can be resold or returned to repay the sum in question. This means that the conditions for obtaining a payday loan are a little more restrictive, the interest rate will be slightly increased and higher guarantees will be required.

What is a payday loan?

What is a payday loan?

A payday loan, therefore, is a loan granted to the client, with a fixed interest rate and a repayment plan, organized in monthly installments, which can last from a few months to a decade. As we said before, it is requested directly by the customer, who goes to the selected bank or credit institution, without having to provide any explanation regarding the way in which it will be used.

As this is a far more risky transaction than banks, these banks may require greater guarantees, and carry out more detailed checks on the situation and financial standing of the client: those who in the past have been reported to the Central Credit, therefore, they could encounter a lot of difficulties.

The guarantees required

The guarantees required

The guarantees required for a payday loan change according to the sum requested: for small loans it is sufficient to show that you receive an income or a pension, while for larger amounts you may need contracts with tighter bonds, and of course your paycheck.

In some cases, for example, banks require that you sign a contract that determines the rate of cumbi (or the resolution of the entire amount in a single bill of exchange) in order to mitigate the risks, but the most frequently requested guarantees it is the involvement of a third person, called guarantor, who assumes the risk of the operation: it is up to the latter, in fact, to pay the sum necessary to cover the expenses that have remained unpaid, if the applicant can not do it for himself.

The guarantor is indispensable above all when the client is elderly, does not have a fixed or sufficiently high income, has a minimum working age, or when the sum in question is particularly high: this figure, generally, is covered by a parent, a relative or a friend.

In other cases, on the other hand, an insurance policy must be signed, the cost of which is added to the loan: this occurs mainly when the client is old, and therefore at risk of death, or when the probability of losing the job (and therefore income) are high. Therefore, it will be up to the insurance company to cover the costs if the applicant should fail before he has paid off his debt, while if he is fired, he will have to repay the amount paid by the company as soon as he finds another job.

However, each credit institution requires special guarantees, based on its own assessments of the transaction: it is therefore impossible to assess a priori whether the loan will be granted or not, as a number of factors come into play, often also linked to variable circumstances.

The contract

The contract

The contract signed by the client and the bank puts the conditions concerning the loan in writing, and must therefore be signed by both parties, as well as contain the following elements, so that it can be considered valid:

  • Type, method and figure obtained with the loan
  • Information on the installment plan (number of installments, deadline…)
  • TAEG (Annual Effective Annual Rate)
  • Interest rate and general costs
  • Guarantees required
  • Consequences in the event of insolvency

What is the APR?

The APR is the Global Effective Annual Rate, and includes both the cost of the loan (sum disbursed plus interest) and the ancillary costs. Unlike the TAN (Annual Nominal Rate), which expresses, starting from the initial figure and the number of installments, the interest rate that is added to the sum obtained, the APR includes all expenses, therefore also those related to any coverage insurance, or charges borne by the customer.

Failure to pay an installment

As we said, on the contract it is also necessary to specify the consequences that the user must meet, in case of non-payment of one or more installments. They are rather unpleasant, as they involve the addition of a default, the inclusion of the name in the Central Risk – which causes great difficulty, if you would like to ask for further financing in the future – and, above all, the risk that the bank unilaterally resolves the contract: in the latter case, the customer will have to fully pay the costs, both those related to the loan, and all the ancillary charges, added to a penalty.

Early extinction

The customer can choose, if he deems it appropriate, to pay the full amount (or the amount not yet paid) in one solution: in this case, the bank can apply a penalty, which by law can not exceed the 1% of the total amount. This method, however, allows the user to ‘get rid of’ quickly a loan obtained under unfavorable conditions, requiring another more advantageous.

payday loans for bad payers

Is it possible to obtain a payday loan if you have been included in the list of bad payers? The answer is yes, even if the conditions will certainly be more restrictive, as the guarantees required could be greater: frequently, in fact, customers who have received a protest are required to have a guarantor or the signing of special insurance coverage.

However, the best way to obtain funding, for those who have been reported to the Central Risk, remains the assignment of the fifth, although this type excludes those categories of individuals who are not dependent on the state, who do not receive a pension or who perform the freelancer.

When NOT to apply for a loan

In a period like this, where the economic conditions of citizens are often precarious and fluctuating, it is good to be very cautious and reflect calmly, before signing any commitment. This is especially true for those who do not have a high income or a permanent job: at the least unexpected, they may find themselves unable to support the monthly installments, thus suffering the unfortunate consequences reserved for insolvent customers.

The same applies to those who have numerous ongoing installment plans: monthly expenses add up faster than expected, and the risk of seeing their income too low, unfortunately, is more than consistent. So, unless you have a relative ready to cover your shoulders, the best thing is to await the extinction of a debt, before contracting another!

Consolidation of Cash and Mortgage Loans – Is It Possible?

Consolidation of cash and mortgage loans – is it possible? Yes of course. All you have to do is have the right creditworthiness and choose a bank. Below are loan proposals for banks in which you can ask for a mortgage consolidation loan.

When searching for a consolidation mortgage, or any other consolidation loan, it is important that it is the cheapest loan possible. And that is why it is so important to compare banks’ credit offers.

Consolidation covers bank loans and cash loans, installment loans, debt on credit cards and even limits on bank accounts. It should be noted that if in loan agreements or loan we have a provision for early repayment, it is unfortunately an additional loan cost.

The amount of the consolidation loan depends on the creditworthiness and creditworthiness. It can be a consolidation loan for € 10,000, € 50,000 and for € 200,000.

It is also possible to take a mortgage consolidation loan against real estate or when one of the loans is a mortgage loan (housing loan).

Consolidation of mortgage loans with cash

Consolidation of mortgage loans with cash

Below is a summary of popular bank proposals in the consolidation loans segment.

What are the advantages of the mortgage loan has already been mentioned: debt consolidation, a long loan period and a significant reduction in the loan installment. And the cons of consolidation loans? It is definitely a more expensive loan, even if we obtain a lower interest rate, because lowering the loan installment is possible only by extending the loan repayment period, and thus we pay higher interest on the loan.

Answering the question: whether the consolidation of cash and mortgage loans is possible, the answer is unambiguous: yes, it is possible. One should only find out in which bank is possible.