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Interest-free loans? How to get?

Recently, there are many ads and interest-free loans for a short period of time. Payday loan. It’s hard to believe that someone can lend us money without making a profit. Are interest-free loans dangerous? What should we pay attention to?

Payday loan have many advantages, but also disadvantages

Payday loan have many advantages, but also disadvantages

The biggest advantage of interest-free loans is the small amount of formalities and quick cash on the account. Quite often, the decision to grant payday loans is based on a statement of income. On the other hand, there are often attempts to deceive clients due to the lack of legal regulations, but there are also people who do not read contracts. This can cause a lot of trouble for the client if he finds himself in a dishonest company.

Remember that payday loans are quick interest-free loans for small amounts for a short period of time. Of course, there are loans without interest rates , but remember thatthese companies must also earn. The most common costs are those that are missing information in all ads. Fortunately, there are more and more loan companies that act honestly and inform customers about all fees. These companies have been working for years to develop a good reputation – they have a wide range of satisfied customers. If, therefore, you have a need to take a payday loan – let’s choose well-known companies, operating for years, enjoying good opinions and recognition among borrowers.

What to look for?

What to look for?

First of all, let’s remember that payday loans with attractive repayment terms should make us vigilant. The most important thing is to read the entire contract. You should pay attention to the costs and the total amount to be repaid within a specified period. This will allow you to clearly state whether the interest-free loan is worth attention. If there are unclear provisions, it is worth explaining them with an advisor of a tax company. Let’s remember that the more we know, the more our security increases. Payday loans are interest-free loans, like any other, – if you can afford to pay your loan on time, you can take advantage of it.

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What happens if I don’t pay a loan?

When a personal loan is requested, it is done with the intention and conviction that we can assume that debt. However, there are times in life when setbacks occur, such as a layoff, illness, separation or unexpected expense, which can destabilize the family budget, preventing us from facing the monthly payment of the corresponding fee.

When we stop complying with the regular payment of our personal loan, it is normal for the financial institution with which we have contracted to send us a notice either by telephone, postal mail or email. What can we do if this situation arises and we cannot cope with the debt?

What does it mean to have a personal loan?

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Article 1740 of the Spanish Civil Code (CC) defines “loan” as a contract whereby “one of the parties delivers to another a fungible asset so that he can enjoy it for a certain time and once this period has ended, return it to his previous owner ». In addition, article 1753 establishes that” he who receives a loan, money or other fungible thing, acquires his property, and is obliged to return to the creditor as much of the same kind and quality “.

That is, a personal loan is a contract in which the financial or banking entity will advance us an amount of money, with the obligation that we return it within a certain period of time, with previously agreed interests and expenses. In addition, this type of loan, as its name suggests, requires a personal guarantee. This means that the loan holder offers all his present and future assets as collateral. Similarly, if a guarantee is presented, the guarantor assumes the risk of jointly taking care of the debts.

When do you prescribe a personal loan debt?

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The first thing to keep in mind is that when we commit to requesting and owning a personal loan, we must be sure that we have sufficient financial capacity to meet its payment.

However, in the face of any setback, we must also be aware that no debt is eternal, they all have a statute of limitations, unless there is a judicial resolution that indicates otherwise. As a general rule, people who take on a debt tend to think that their indebtedness prevails until the total amount that has been loaned to them, in addition to the interest, is not paid. The truth, however, is that, in Spain, debts are not eternal, but are limited by Law 42/2015, of October 5, amending Law 1/2000, of January 7, on Prosecution Civil (SP / LEG / 18525), which establishes a maximum period of five years for the extinction of debts without a specific specified term.

When do you prescribe a personal loan debt?

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In the case of the personal loan, the debt is also extinguished after five years, both of the interest and of the principal amount. This rule also applies to any non-mortgage loan, including credit card debt. In the case of mortgage loans, the debt prescribes at twenty years.

Can I be repossessed for a personal loan?

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Before applying for a loan, it is important to ask yourself a series of questions: Do I have a healthy economy? Do I have enough income to meet the monthly payment? Do I need someone to guarantee me? 

Placing ourselves in each of these scenarios will help us not find ourselves in an undesired situation in the future. Before the first installment that we stop paying, the financial institution will begin to apply default interest, the amount of which is greater than that of ordinary interest.

Can I be seized for a personal loan?

These will gradually accumulate to the initial debt, so that it will continue to grow month by month and each time we will owe a higher amount of money. If this situation continues over time (generally between three and six months), the financial institution will finally initiate a claim through the courts.

As we have seen in previous lines, a personal loan requires all our present and future assets as collateral. So if we cannot assume the payment and the claim goes to the judicial sphere, it is most likely that all the assets that are in our name will be seized from us.

What can be seized if you do not pay a personal loan?

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Next, we will see what can be seized if you do not pay a personal loan. The most common is to start with bank accounts and payroll. But if the amount that we owe is very high, the judicial sentence can happen to seize the house, the car, the pension, etc. In short, any good necessary to pay off the debt.

In addition, if for us to be granted the loan it was necessary for another person to endorse us, the judge may decides to seize, in turn, the assets of this person, since he has acquired joint and several liability for the debt. Finally, do not forget that not paying a loan also implies that your data be registered in the files of defaulters such as RAI (Registry of Unpaid Acceptances) or ASNEF (National Association of Financial Credit Establishments). This will make it difficult or even impossible for you to obtain financing in the future from a financial institution.

Can my house be repossessed for a personal loan?

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Although, generally, when requesting this type of loan, no real or mortgage guarantee is provided, we are implicitly guaranteeing this debt with all of our present and future assets. So when asked: Can my house be seized for a personal loan? The answer is yes, if the judge considers it necessary, depending on how high the amount we owe, he can rule that all our assets, including housing, be seized.

How do I know if I can request a risk-free loan?

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After all this information, if you still wonder how to know if I can ask for a risk-free loan to lose everything, in this section, we give you the main keys.

  • First of all, make sure that you are in a healthy and stable financial situation.
  • Check that you can meet the requested amount, as well as the monthly payments.
  • Negotiate with the entity some installments and terms that adapt to your needs.
  • Avoid taking on new debts once you are a credit holder.

If in spite of these tips you see that you are not going to be able to pay the installments of your personal loan, it is best that you immediately contact the financial institution. Normally, this will offer you an alternative, such as refinancing the debt, extending the repayment period or requesting a grace period. At Capital Credit, for example, we offer you personalized loans that you can comfortably repay within a maximum term of 36 months. In addition, if you have already paid six installments and you are a little in a hurry to pay one of them, you can request a month of respite. As you can see, there is nothing to fear, everything is a matter of organization and responsibility.

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What is a loan simulator?

You need money? Are you thinking of renovating your old car and getting a safer and more sustainable one? Did an unforeseen financial problem come to you that you did not count on and caught you with the card trembling? Have those deserved holidays finally arrived and you don’t have enough savings to enjoy them as you would like? We know that perfection does not exist, but if there were a loan that approached it, it would be the one in which we can dispose of the money as soon as possible.

Offer us the possibility of returning it comfortably over time without abusive fees or commissions

In case you are thinking of requesting a personal loan to face that small economic mishap, a loan simulator can be a great ally to analyze which entity offers you the conditions that best suit your situation and specific need. Personal loan simulators are online calculators that help you know which type of credit and which bank is best suited to the financial situation that we need to solve. This loan simulator allows us to obtain an estimated calculation of the installments to be paid, the interest rate and the time that a personal loan must be paid based on the amount we request and, in some cases, our financial situation in the time of the request.

Each entity usually has its own online loan simulator

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There are some who, before being able to perform the calculations, ask you a series of questions such as whether you are already a customer, the number of account holders, financial information or if you have already contracted some other banking product with the company. This may favor obtaining personal credit under more advantageous conditions. Specifically, the Bank of Spain, which is the supervisory body of the Spanish banking system together with the Capital Lender, provides an installment simulator to be paid on a loan that allows you to calculate the initial amount with a certain interest rate and term.

Why use a personal credit simulator?

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As we saw in previous lines, the personal credit simulator allows us to know the terms, maturities and monthly installments that best fit our economic possibilities. Although, being an approximate calculation, they cannot take into account all the factors that influence, for example, the granting of a variable loan, just by entering the amount and the terms in which you want to repay the debt, you can already do an idea of ​​the type of loan and its interests.

This information is essential to analyze our financial situation and check if we can really face the monthly payment of the installments of a personal loan, based on our income, expenses and debt capacity.

How is a loan payment calculated with a simulator?

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The simulators to calculate the installment of a loan are usually very intuitive. Normally, the tool itself usually directly enters the interest rate with which the entity operates, so you only have to enter the website, go to the loan installment simulator and enter the following information:

  • The quantity you want to request.
  • The applicable interest rate if you know it (normally the calculator itself usually automatically enters this information).

The installments in which you want to repay the loan

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With these simple steps, the vast majority of loan simulators can now estimate your credit, informing you of the most advantageous offer for the amount of money you want to request and the terms in which you would feel more comfortable returning it.

Traditional banking entities also often request other information such as whether you are already a customer of the entity, the number of account or account holders, the existence of payrolls or guarantees or if you have already contracted some other financial product. The purpose of this consultation is to fine-tune their offer to offer you the most profitable and attractive conditions. However, if you do not comply with any of these premises, the bank may directly decide not to grant you the loan, since its conditions are generally stricter than those of fintech companies.

How to use the Lender Credit simulator?

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At Lender Credit we look for the way to make it as easy as possible when it comes to getting the money you need. For this reason, we have designed an agile, fast and intuitive loan simulator. You just have to enter our website and enter in the personal credit simulator the amount you want to order and the term in which you want to return it: our calculation tool, equipped with the most advanced technologies, will show you the approximate figure that will allow you get used to the idea of ​​the financial effort necessary to repay the credit.

The credit simulator that we offer you in Lender Credit calculates the fee that you will have to pay approximately, according to the requested amount and the term in which you want to return the money. However, to know what the final monthly payment is, you must send us the following documentation:

  • Valid ID or passport that certifies your residence in Spain.
  • A selfi that certifies who you are.
  • A bank account number in Spain for us to transfer the amount of your credit.
  • A contact mobile phone number to contact you and let you know the status of your request.

You need to meet a number of requirements

First of all, you must be of legal age. Secondly, it is essential that you have a demonstrable source of periodic income (payroll or pension, benefit, regular income as a self-employed person). Finally, they should not have included you in a list of delinquencies such as Credit Institution. This will allow us to know your financial situation at the time of the request and, in this way, we will be able to adjust the loan conditions to your personal circumstances.

All in all, the amount shown at first by the Lender Credit simulator may vary in your favor throughout the repayment period: if at any time you decide to pay a higher fee than what we proposed or to repay a part of the loan, They will reduce the total interest and, consequently, the final amount that you will return to us will be less. In addition, at no time will we apply commissions for opening, management or cancellation (total or partial).

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What types of loans are there?

In the financial market there are many types of loans, with different characteristics. Knowing them in detail will help us select the one that best suits our needs or financial situation. Go for it!

1: Personal loans

1: Personal loans

Personal loans are those financial products that allow us to finance the acquisition of durable goods (for example, a car), pay for a master’s degree, take a trip or make a reform. This type of service is formalized through a contract that establishes the amount granted and the periodic fees that we will have to pay, which includes interest, commissions and expenses according to the agreed conditions.

In recent years, thanks to the advancement of Fintech technology, fast loans have been positioned as the best product for this type of financing. Among its advantages is speed (in a period of between 24 and 48 hours you can access the money requested), flexibility when applying for credit and security (in addition to being regulated by Law 16/2011 on consumer credit and act under the supervision of the regional authorities, fast credit institutions have an online technology that allows them to combat fraud and scam, as well as identity theft crimes).

2: Business loans

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One of the most common situations in which companies need to apply for a loan is when they decide to make a significant investment in a good or service to improve productivity or boost business growth. In the current context, due to the economic crisis, companies have not had easy access to loans and credits from traditional financial entities. Fortunately, new legal figures and operations have emerged that allow obtaining the liquidity necessary for day-to-day life quickly and easily.

However, it must be borne in mind that when an entrepreneur faces the situation of applying for a business loan, he must provide documentation that justifies to the financial institution not only the need, but also the viability of this operation, in order to face your amortization. In this sense, the new financial entities that operate through the internet in an agile and efficient way allow the necessary steps to be taken online to receive the economic injection at the right time for the investment.

3: Freelance loans

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The self-employed sector is, without a doubt, one of the most difficult to find when it comes to obtaining financing. In the case of traditional financial institutions, in addition to the usual documentation, the following documentation is usually requested:

  • Business plan.

  • Proforma invoices or budget of the investment to be made.

  • Tax declaration of the last three years, with annual summaries of VAT and personal income tax or companies.

  • Quarterly declaration to the Treasury of the current year and accounting situation at the time of the request.

  • Details of the financing operations that the applicant has with other financial entities.

  • Last payment to Social Security.

  • Proof of stable income.

  • Photocopy of the registration document as a freelance.

  • Length of service in the company and type of contract.

In addition, when applying for one of these self-employed loans, it is convenient to assess some aspects:

  • Consider contracting short-term loans, since they are very useful to deal with overdrafts at specific times when liquidity is needed.

  • Look for banking products specifically designed for the self-employed, since these respond better to the specific needs of this group.

  • Before applying for the loan, it is advisable to make an exhaustive business plan in which the payments to be made are taken into account. For this you can design an amortization table where the interest and the capital to be paid are broken down during the term of the loan.

4: Consumer loans

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Consumer loans are all those financial operations designed to satisfy personal needs. It is, therefore, credits requested by a consumer who has the need to acquire goods or services for non-professional use: the purchase of furniture, the purchase of a household appliance, the need to cover the expenses of a wedding, a trip, etc.

Normally, this type of product is usually offered in the establishments where the good or service is purchased, it would be a kind of deferred payment. This makes it easier for the user to make the purchase, since they can contract the financing service at the same time, without having to carry out more procedures or travel. However, the consumer is carrying out the procedure directly with an entity, so the establishment, in reality, would be acting as a mere intermediary.

As in traditional loans, the term in which the debt will be amortized is normally stipulated in the contract, as well as the interest that the applicant must pay for its installment payment.

5: Student loans

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Student loans are an increasingly common alternative for those who are interested in enhancing their professional development either by completing a master’s degree or by accessing specialization courses, doctorates or stays at foreign universities.

Normally, these types of loans are usually differentiated according to the purpose for which the funds are used:

1) Loan for scholarships: it is an advance to the student who has been awarded a scholarship to defray the expenses he has until he receives the money of said scholarship from the institution.

2) Tuition loan: This financial aid is intended to pay university fees. You can also include an amount to cover cats with school supplies, accommodation or child support.

3) Postgraduate loan: it is normally used in cases where you want to pursue a master’s or doctorate.

4) Loan for studies abroad: in this case the amount is used to cover the expenses of an Erasmus or other type of residence at a foreign university.

6: Mortgage loans

6: Mortgage loans

A mortgage loan is one whose purpose is to grant a certain amount of money that will go towards the purchase or restoration of real estate. This type of financing, in addition to involving amounts of money greater than personal loans, has a real guarantee for the financial institution. In the event that the client does not have the capacity to repay the money committed in the loan, the credit company can sell the mortgaged property to repay the debt or become the owner of the same. Thus, having an effective guarantee is one of the safest loan operations for the entity that grants it.

Due to the high amounts granted, the terms for their return are usually longer and the interest rate payable is shorter

The maximum amount granted by the financial institution is usually around 80% of the appraised value of the real estate and the fee to be paid is usually 35% of the net monthly income of the person requesting it.

As we have seen, a loan is a commitment that should not be taken lightly. To be able to face and get the most profitability, we must acquire a prior knowledge of the types of loans and their particular characteristics, as well as carry out a study of our financial capabilities to face debt within the established terms.

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What is a private loan?

Sometimes the requirements imposed by banks and financial institutions are too rigid and strict. It may also be that we need the money with some urgency and the bureaucracy of traditional entities delays it more than we would like. In these situations, we are forced to look for alternative financing and one of the options that we can consider is to request a loan between individuals. However, it is important to know the adversities of contracting one of these loans before launching to apply for it. For this reason, at Lender Credit we want you to fully understand what they consist of and what risks they entail. Shall we start?

Private loan: what is it?

Private loan: what is it?

The loan between individuals is a form of financing in which no financial institution participates, only two natural persons intervene: the lender and the borrower. The lender establishes a series of conditions, such as the repayment period and the interest rate, which must be met and accepted by the other party.

In this way, when requesting a loan between individuals, we are reaching an agreement with another person, who will lend us the money we need in exchange for meeting certain conditions. As with other types of loans, the terms of these agreements may vary, so we must take into account the characteristics of the agreement that we signed.

Who can be a private money lender?

A private money lender is a person who offers and loans money to other individuals. They work independently, which means that their activity is not backed by any financial institution. However, at this point you have to differentiate between lenders that operate under the law or those that do so illegally. When we talk about a personal loan between individuals, these are regulated by Law 16/2011 of June 24, which establishes the obligations between both parties. According to this law, if the default of a loan between individuals occurs, the client will face the debt with all his assets, present and future.

Precisely at this point comes one of the biggest drawbacks: loans between individuals usually have a high economic cost and, by responding to them with our assets, we can see how all our assets, including the current account, the home or any other, are seized from us asset that we have in property. On the other hand, we can find lenders who operate illegally, which can be a big problem, since we can be subject to extremely abusive conditions that, in the event of non-payment.

Can pose a risk to our personal integrity

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Fortunately, in recent years, the boom in Fintech technology has led to more and more alternatives to bank credit. Thus, entities such as Lender Credit, specialized in online financing services, prevent us from being forced to resort to private lenders. If, in addition, they operate under the philosophy of responsible lending, this will give us the peace of mind of knowing that our debt will not grow indefinitely. However, sometimes we may be tempted by some types of loans between individuals. Let’s see some of them:

  • Interest-free private loan

Ads for interest-free loans between individuals are rare. By providing services mainly to people who do not meet the requirements to be served by an entity, it is understood that the level of risk assumed by lenders is quite high, so that interests are generally higher among individuals than resorting to a Bank.

As a general rule, non-interest-bearing loans between individuals are those made between family and close friends who do not intend to obtain benefits from the loan. In these cases, the agreement must be formalized in the same way as an interest loan, that is, with a contract signed by the two parties in which the rest of the conditions are specified: amount loaned, repayment term, etc.

If we are faced with an announcement of a loan between individuals without interest, and it does not come from a close friend or family member, it is better to be suspicious, because surely we will have to respond with an endorsement or it is a high risk for us.

  • Loan between individuals without guarantee

While interest-free peer-to-peer loans are not as common, unsecured loans are quite common. It consists of a loan in which the borrower is not backed by anyone who pays his debt in case he is unable. Therefore, the lender assumes a higher risk, since it does not have the guarantee that the borrowed amount will be returned. Again in these cases we must be suspicious, since, by law, when requesting a loan from another individual, we respond with all our assets, so we can lose everything, even if they have asked for a guarantee.

What is a private loan agreement like?

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Just as the request and granting of a loan by an institution to an individual requires the signing of a legal contract that both parties agree to fulfill, when the loan is between individuals, it is also necessary to formalize a contract. Because private lenders are not always as trustworthy as they should be, it is important that the private contract contains all the information necessary to avoid misunderstandings and subsequent problems.

We want to explain what sections and what information is essential in these documents

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First, the personal data of the two signatory parties must be included: lender and borrower. Those data are: DNI, name and surname and address in most cases.

Next, a series of clauses must be included in which each of the conditions that characterize the loan is described in detail. They will vary depending on the type of the loan, for example, whether or not it has interests and whether or not it requires a guarantee. The information that should not be missing in the clauses is the following:

  1. The amount of money borrowed.

  2. The borrower’s commitment to repay the loan and the interest rate, if any.

  3. The repayment period of the loan.

  4. Conditions under which the contract is extended in case the debt has not been repaid within the established term.

  5. In the event that the borrower breaches the contract, the lender may terminate the contract before the agreed term of maturity, provided that it previously notifies it by means of a request to the other party.

  6. Applicable legislation to interpret the contract.

Furthermore, it must be specified that both parties intervene voluntarily in the contract and have full legal capacity to sign it.

Finally, at the end of the contract, the lender and borrower will sign and receive their corresponding copy of the formalized document. As we said, we recommend you not to resort to this type of loan, since they pose a high risk to us. Yes, in any case, you have to request a loan between individuals, then it is advisable to have a legal advisor to review the contract and its approval, since it is essential that the contract is well tied to avoid scams, extortion or other problems.

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Loan for proof for the indebted – what is it and for whom?

Have you run into financial problems? Do you already have debt and you don’t have a chance to get a loan from a bank? Don’t worry, the loan company is able to offer you a loan for proof of those in debt. What is this ID card loan for those in debt? Who can use it? You will learn this from the text below!

Loan for ID for those in debt – what is that?

Loan for ID for those in debt - what is that?

A loan for ID card is a financial product that can be found in the loan company’s offer. Already after the name, we can conclude that we are dealing with a commitment that is granted for an identity document, so you must be at least 18 years old to be able to apply for a loan. The lender does not require any additional documents to be submitted.

Therefore, we do not need either an employment certificate or a salary certificate or bank statement confirming regular cash inflows. It is also worth mentioning that the loan for ID card for those in debt does not involve checking credit history or registers of debtors. The lender also doesn’t expect good credit standing, so it’s a solution that can provide the cash you need quickly.

The loan for ID card is granted in various amounts – from several hundred dollar s to even several thousand dollar s. This means that people who need five hundred dollar s as well as those who need five thousand dollar s can apply for financial support.

A loan for a debt proof is a type of short-term liability, ie one that loan companies grant for a short period. We can have a few to several days to pay back the loan, but the longest it is usually 30 days.

Loan for evidence for those in debt – who can use it?

Loan for evidence for those in debt - who can use it?

As we have already mentioned, a loan for an ID card is a product for people who are over 18 years of age and have a valid ID. Sometimes it is possible that loan companies require the age of 21, therefore, but when applying, do not experience disappointment, it is better to check immediately what conditions we must meet.

What is certain is that the lender provides support to everyone – regardless of gender, religious or political views. This means that anyone who has financial problems or needs cash urgently can get it here.

A loan for ID card can be the best choice when the bank refuses to grant you a loan or if you want to avoid lengthy formalities. Unfortunately, banks have the ability to keep clients uncertain even for several days. In crisis situations, unfortunately, there is no time to wait, which is why the loan for evidence for those in debt looks much better.

It is also worth mentioning that a loan for a debt proof is ideal for people who are already struggling with debt, are wearing a bailiff and are looking for an effective way to overcome financial problems.

Loan for evidence for those in debt – what does the loan application process look like?

Loan for evidence for those in debt - what does the loan application process look like?

Loan companies usually offer several ways to apply for a loan. The same applies to loans for ID for those in debt. People who prefer traditional solutions can personally report to the nearest branch of the selected loan company and complete the formalities there.

People who value convenience and like to do things from their home can apply online. For this we need a device with Internet access (phone, tablet or laptop), as well as some free time. Importantly, we can apply for an online loan at a convenient time because the applications are available twenty-four hours a day, seven days a week.

The formalities related to applying for a loan as proof of debt for those in debt have been kept to a minimum. The only document required here is an identity card. However, we must be aware that it must be important. If the expiry date of our document has long since passed, we must first replace it, and only then we can complete the formalities.

After completing the application, we can submit it for consideration – in person or online. When we do this, we must wait for the lender to issue a decision. Usually it takes from several minutes to several days.

Loan for evidence for those in debt – what can the funds be used be used for?

Loan for evidence for those in debt - what can the funds be used be used for?

Banks have accustomed us to the fact that they usually offer their products for a specific purpose. A consolidation loan can be used to pay back liabilities, a car loan to buy or repair a vehicle, and a mortgage for real estate purposes.

In the case of loan companies, such practices are not used, which means that the money received from the loan as evidence for the indebted can be used for any purpose. We can pay our debts or bailiff for them, but we don’t have to. We may as well use money for current needs, renovation of a flat or the coveted vacation. It is important that we are able to repay the commitment later.