Consumer loans are a type of loans that are part of our daily lives, although it is not always totally clear what makes them special. In this article we tell you what exactly is a consumer credit, what are its advantages, its disadvantages and how to get them.
The Bank of Spain explains very clearly the two basic characteristics of these loans:
- They are loans granted to “satisfy personal needs” of the client, regardless of their professional activity. Therefore, the use of these credits for consumption can be allocated to any aspect of the private sphere, without having to give explanations about it: expenses for vacations, for Christmas purchases, for the acquisition of technology, etc.
- Its amount must be at least € 200.
According to Law 16/2011, there are bank loans that can not be considered consumer loans. Among them are those that are mandatorily assigned to a specific purpose, as is the case of the mortgage loan, which has the objective of buying a home. Neither can be considered ‘consumer loans’ those agreements that are intended to pay an existing debt “without interest, commissions or other expenses”, since in that case there is no money concession but only facilities for payment of that debt.
How to get consumer loans
The traditional way to get a consumer credit is to go to the bank office or the premises of a financial company and make a credit agreement. Before signing this contract between bank and client, a series of previous phases must be overcome, such as the study of the economic situation of the applicant or the delivery of a binding offer by the entity, where all the conditions of that entity are collected. loan (commissions, terms, amounts, etc.).
However, a new way of requesting consumer credits has arisen thanks to the irruption of the Internet: the online mini-loans. This type of loans can be considered ‘for consumption’ because in most cases it exceeds € 200 and because it can (and usually) be used for personal expenses, without the client having to explain them. With Ananse, although the minimum amount to request is € 50, you can greatly exceed the figure of € 200. In fact, the maximum stipulated maximum for any client is € 750.
Advantages and disadvantages of consumer loans
The main advantage of these credits is evident: they help to make personal purchases that, for some reasons or for others, do not want to be carried out ‘at once’: most of the time, they are requested to favor the fractionation of a payment, but another very common reason is the possibility of postponement of this expense, either due to lack of liquidity, the emergence of other unforeseen expenses, etc.
Regarding the disadvantages, we must analyze each credit modality to discover them. In the case of bank consumer loans, the great disadvantage is bureaucracy, which complicates and lengthens its concession. Travel, economic studies, signing of a contract and a long list of requirements that may delay the receipt of money over time. In addition, these requirements are often very demanding: for example, credit is usually denied to applicants without a fixed payroll or without the possibility of providing guarantees or guarantees in the form of equity. Those who are registered in the lists of defaulters, such as Financial credit institutions, also receive a ‘no’ answer when they come to learn about these loans.
In the case of online mini-credits for consumption, the drawback that could be cited is the short period of time for the return (30 days maximum in Ananse), but in reality it is a disadvantage that becomes an advantage if we analyze it from another point of view: the numerous commissions that are paid in the monthly payments of traditional consumer loans. Normally, the greater the number of monthly installments for the return, the greater the total amount of interest to be paid by the client, so it is not always interesting to establish a long return calendar. In addition, traditional banking also includes fees for study, opening, closing, early cancellation and other items. On the other hand, if we take into account that the amount of the mini-loans is always moderate and affordable, it makes no sense to split the amount to be returned in several installments.
The online mini-credits to consumption also escape the other disadvantages attributed to traditional loans: there are hardly any paperwork or travel because they are requested directly by Internet and the requirements for the concession are very basic (at least with Ananse), since both people present in Financial credit institutions, like others without a payroll or without a guarantee, can access this financing channel.