The personal loan is a consumer credit product that provides for the financing of a pre-established sum at a fixed interest rate, and repayable according to a repayment plan in constant installments. It represents the most widespread form of financing in Italy and, despite a slight decline, still resists the consequences of the economic crisis.
The advantage is that it is a loan not finalized, and therefore it can be requested without having to justify the use that will be made of the financing obtained. Its payment is therefore not subject to the purchase of a specific product or service, and the bank makes it available directly to the customer who requests it, without the intermediation of a seller with whom it has an agreement.
Although this is an unfinished loan, it is advisable to tell the financial institution how the requested amount will be spent (also providing a quote countersigned by the retailer, if possible). In these cases, there is no relationship between the credit agreement and the sales contract, nor is there a relationship of collaboration between seller and lender, but by providing this information it is possible to obtain more advantageous rates from the lender. In this sense, it is possible to access the detailed guides for the major personal loans based on specific purposes:
- Furniture loan
- Renovation loan
- Home purchase loan
- Liquidity loan
- Marriage loan
- Medical expenses loan
- Travel and holiday loan
It is possible to request a personal loan by contacting various distribution channels: banks, financial institutions, the web, where the advantage is that the offers are numerous, more easily comparable and have shorter payment times. If, on the other hand, you decide to turn to traditional channels, it is important to know that a bank often takes a long time to disburse the loan than financial intermediaries, but often offering more favorable conditions.
THE ELEMENTS OF THE CONTRACT
The loan agreement must be stipulated in writing and contain the following information:
- Exact indication of the sum paid
- Interest rate applied
- Specific indication of the annual percentage rate of charge ( APR )
- Any costs and commissions related to the contract
- Preliminary charges and ancillary charges , such as the cost of sending the periodic report, any insurance costs and costs related to late payments
- Amount of installments and their maturity
- Indication of any guarantees and insurance required
Financial institutions adopt their own criteria for the evaluation of a request for personal credit, within the framework of general directives and rules set by the Bank of Italy .
In principle, the loan can be requested by people between the ages of 18 and 70, with “repayment ability” , who can then present the pay slip, the tax return or the pension slip in the case of workers employees, self-employed or retired, respectively.
The amounts that can be requested for a personal loan usually do not exceed 30,000 euros and the restitution of the sum can vary from 12 to 120 months .
TAXES AND THRESHOLDS OF WEAR
Every quarter, Bank of Italy publishes information on average effective global interest rates (TEGM) and maximum rates for usury for each type of financial product (from overdrafts on current accounts, to personal loans, to mortgages to fixed and variable rate). For personal loans in the quarter 1 April – 30 June 2013, the average rate of personal loans stood at 12.10% , while the limit for the rate of wear threshold is 19.125% .
Based on the ” development decree ” of 2011, the method of calculating the wear rate is determined as follows: TEGM x 1.25 + 4 (where the wear rate minus the average rate is less than 8).
When choosing the loan best suited to your needs, you need to consider not only the nominal annual rate (TAN), but also the annual percentage rate (APR), which shows the total actual cost of the loan. It is the indicator that includes, in addition to interest, costs and accessory charges.
Only by considering the APR is it possible to make a transparent comparison of the products offered, of the same amount and duration.
In general, the granting of a personal loan is not subject to the presentation of real guarantees (or pledge or mortgage rights on assets owned by the applicant). However, in order to limit the risk of insolvency on the part of those who use the financing, the institutions often require the presence of subjects who guarantee the payment of the loan.
This is a particularly widespread practice, especially in the face of a particularly high amount requested, or in the presence of a subject with a particularly recent seniority.
It is therefore possible to opt for a co-obligor , who shares responsibility for the credit, or for a guarantor , usually a family member of the debtor, who assumes responsibility in the event of default.
PRESENCE OF INSURANCE COVERS
There are other forms of guarantee, such as the authorization to sell a portion of one’s salary in the event of default, or the stipulation of insurance coverage to deal with any unexpected risks such as death, illness, permanent disability or loss temporary work by the applicant. However, these are optional policies, the cost of which must be taken into account, as it helps to increase the total cost of the loan.
In general, the method of disbursement of the personal loan takes place with the introduction of liquidity directly into the applicant’s current account. Similarly, the repayment is managed by paying the installments directly from the current account or, in some cases, by issuing postal bills.
It is important to avoid both the delay in the payment of an installment and a non-payment of the same. In the first case, the institute warns the consumer, by sending the ” registration notice “, of the risk that his name may be reported to the central risks . The debtor can then arrange for immediate payment, to avoid being indicated as a protested subject.
In the event of non-payment of an installment, however, the credit institution may decide to unilaterally withdraw from the contract, requiring the debtor to pay the sums due and the charges incurred to recover them, plus a possible penalty.
If you are afraid of incurring such consequences, you can apply for a flexible loan , which provides for the possibility of postponing the payment of one or more installments without incurring any penalty, or entering into an insurance to pay the loan in the event of permanent disability, illness or loss of work by the contractor.
On Tweedledum and Tweedledee.it we monitor day by day the conditions applied to all personal loans from affiliated banks and financial institutions and we update daily a table with the best offers of the day. In this way, our customers only need one click to discover the best personal loan today. Alternatively, you can fill out the form and make a quote to compare all personal loans to each other and find those with the most advantageous conditions: it is simple and fast, and above all free and without obligation.