banks
It’s very simple: loans are issued by banks, microloans are issued by legal entities with the appropriate license. Despite the apparent similarity, credit and micro-credit are completely different things. The Bank issuing the loan is a http://usapaydayloans.info/colorado/ large financial organization that «works» with money in General. The Bank is interested in your income, your credit history, guarantors, and so on. MFIs are loan sharks in the » old » sense of the word. You are given a small amount at a high percentage, and you are obliged to return it by hook or by crook. The microfinance organization is not particularly concerned about your credit history-signs of current solvency, usually determined by the appearance and absence of debts to other organizations on the day of treatment, will be enough.
2 interesting conclusions follow from the above:
The Bank solves problems with debtors through the legal system (bailiffs), so as not to spoil the reputation and not go beyond the law. The ICC solves problems with debtors in any available way-collectors, for example. Profit in this case is more important than reputation.
The Bank has strict requirements for borrowers, while microfinance organizations are not afraid to take risks and give money to those who may not return it.
Finally, banks have the right to lend any amount, while microfinance organizations are legally limited to a ceiling of 1 million rubles. Obvious conclusions can be drawn from the advantages and disadvantages:
Take a microloan only when you are sure that you can return it.
Take the minimum required amount for the minimum possible period.
No matter how difficult the financial situation is, if you do not have a source of income that can cover the mini – loan by the end of its term, do not take it, because a short-term respite will turn into even deeper financial problems. Do not take a large amount for a new TV and other optional purchases – you will have to pay a lot for them, it is banal unprofitable. Microloans are appropriate when:
you need to «live up» to the salary;
you do not have enough 1000-5000 rubles for some purchase;
something emergency happened (illness, fire, and so on), and your life depends on borrowed money.
We should also mention «credit for loan repayment» and mini-loans for business. The first case, taking a microloan to repay another loan is not the best idea, which should be treated very carefully. There are situations when this is really necessary – for example, you do not have money left to pay off a monthly payment in the Bank, because your salary was delayed. In this case, you take a loan from a microfinance organization, repay the loan so as not to «get» fined, and then return the loan. But if you are not sure that you can repay the microloan-do not take it, because in the end you will find yourself in an even deeper credit hole.
Loans up to 1,000,000 rubles for business is a borderline idea. On the one hand, taking a full-fledged business loan from a Bank is a very difficult task, and getting money from an MFO is much easier. On the other hand, we are talking about a large amount, and it will be more difficult to give it than 1000 rubles taken before the salary. Here you can advise the following: if you need to» patch » a suddenly formed hole in the budget, and you are reasonably sure that you can return a microloan-take it if there are no other options. If you are just going to open a business-try to take a loan from a Bank, in case the business plan does not work, it will be easier to deal with debts.
