Loans granted at the client’s home are older than installment loans granted online. Nowadays, many have doubts about whether they are profitable. Let’s consider the pros and cons of a quick loan offered at the client’s home.
A quick installment loan at the client’s home is a beneficial solution for all those who banks and non-bank companies offering payday loans have refused financial assistance. Why? Because it is granted on individual terms, by the representative of the company – the parabank. A customer applying for such a loan does not need to have a bank account. It may have a negative history in BIK, low scoring, as well as be entered in the registers InfoMonitor, ERIF or KRD. It is not checked in any of these databases. For this reason, it may even have large bailiff seizures that do not affect the final decision on granting the loan.
So how is a quick loan granted at the customer’s home? Mainly based on statements of the applicant for financial assistance regarding employment, earnings, expenses and commitments. Depending on the parabanks and the specific habits of their representatives, it can also be granted based on a bank statement for the last few months, water, gas, electricity and telecommunications services bills, PIT form from last year, employment contract, commission and work and other documents and papers that can confirm a representative’s belief in the customer’s creditworthiness.
A financial product such as “a quick loan at the customer’s home” is more like a loan than a loan. The loan agreement is long-term and binding, with a repayment period of at least several months. The repayment is divided into equal or decreasing installments, monthly or weekly. In addition, a loan at the client’s home can be granted for a high amount – one that is hardly sought, for example, in companies offering payday loans online. An advantage of a loan at the client’s home is also its immediate cash payment and relatively short time of granting.
Unfortunately, a quick loan at the customer’s home is one of the most expensive financial products of this type on the market. This is due to the fact that the total amount to be repaid consists of many independent elements. The first and indisputable is the amount of the loan, the next – the commission for granting it, the next – the cost of home service (representing over 40% of the loan amount, often inadequate to the number of activities related to service). The cost of the loan is also increased by various fees, for example operational or preparatory, as well as interest.
Parabanks offering a quick loan at the client’s home repeatedly violate all regulations. They do not inform clients about the actual annual interest rate, giving one which is calculated on the basis of the analysis of interest and commissions themselves, excluding the fees mentioned above.
The real cost of a quick loan at your home is over 200%. This means that the client gives over 300% of the amount incurred, which in the case of repayment in installments is simply crushing. Despite this, many clients take out a loan at the client’s home from the parabank and repay it, although this loan is financially unprofitable.
Looking at purely economic considerations, a quick loan at the client’s home definitely does not pay off. However, this may be the only form of financial assistance available to persons appearing in BIK, BIG InfoMonitor, KRD, ERIF and with bailiff activities. The decision whether to take it or not should be left to the borrowers themselves.