Tag Archive small loan

What to Do if One Did Not Manage to Pay a Small Loan Back in Time

Payday loans are issued to households with moderate income. They often lack stable work. Their monthly income is not very high. Financial instability does not give a chance to many Americans to return a payday loan in time. This can lead to very negative consequences. A borrower has to have a clear understanding of what to do if he/she can not return a credit in time.

Actions to Take

A short-term credit issuance process runs similarly to the process of long-term credits issuance. A borrower has similar obligations. The only thing that differs is the sum of a credit. A loan agreement is a key document that determines the terms and conditions of credit taking. These documents have to be written by professionals. It is good if it includes clauses on consequences if a small loan is not paid in time by a borrower.

Each borrower has to remember that the loan agreement is a legal document. In case a small loan is not returned in time, the lending company may bring a borrower to a trial. Here are several things that a good loan agreement should contain:

  • Return date. This date is very important to every borrower. When this date comes, a lender will withdraw loan body plus interest rate from a person’s account. If money is not there, a lender will contact a person. Financial company will ask when money will be returned. From that day on a borrower be charged an additional fee on a loan. If one returns a loan a week after a return date, a fine will be moderate. This will be 1% percent of credit body.
  • Fine sum. It is very important that a loan agreement contains a certain statement of what a fine should be. It is usually stated percentage wise. If the contract does not contain such information a borrower is in big trouble. A sum of a fine will be determined by court decision.
  • A clause on what process will be if a person does not return money in time. In the majority of cases, it will be taken to court. A lender will state at a court, a borrower did not return a loan back in time. Financial company will employ a lawyer, who’ll lead the case.

If one does not pay a borrowing when he/she has to, the lender will start a juridical process. There is only one exception. A borrower can guarantee his credit by personal property. In this case, a lending company will appeal to a court with the request to confiscate the property.

In case a lender did not guarantee a borrowing with the property, he/she will be assigned a fine. If a return date comes and a borrower does not have money to pay, he/she has to contact a lending company. Financial company will appreciate that a client informs about the problem. It is good if one can state the date when he/she will be able to return the loan. During the conversation, one should ask how much his fine should be. It is good to immediately employ a lawyer.

This is the main thing a person should do. If one employs a good lawyer, a process will run smoothly. He/she will need only to pay a fine.

Online Small Loans – Frequently Asked Questions

Before resorting to services of online microlending organizations, it is necessary to be aware of all the nuances of the deal. In order to keep you 100% informed, we have prepared answers to the most frequently asked questions so that you know everything.  

What Is a Payday Loan?

A small loan is a quick form of lending, which allows you to get money with a minimum package of documents. The main features of payday loans is a short term and a small amount of money provided to a borrower.

Who Can Apply for an Online Small Loan?

Every citizen at the age of 18 or more can submit a loan request. The status and type of employment are not taken into account when considering an application.

What Risks May a Small Loan Entail?

There are no risks at all. All personal information provided by the borrower remains hidden; the data are used only for person identification and financial reports. Even if you are unable to return the full amount on time, repayment terms can be extended upon request.

What Is More Profitable: a Small Loan or a Bank Loan?

If you need a large amount of money and have a high income level with a certificate proving it, then you can count on a bank loan. In case you need money right here and right now and there is no certificate proving your paying capacity, a small loan will be a good option for you to solve a financial problem within an hour.

What Is the Procedure of Obtaining a Small Loan?

You can obtain a short-term loan in a microfinance institution in two ways. You can visit the company central office or fill out an application on the official website of the organization. The second option is more convenient, as it allows you to get a small loan in a few minutes.

The process of obtaining a payday loan occurs in 4 stages:

  • Account registration on the website;
  • Filling out an online form;
  • Waiting for personal data verification and receiving a response from a financial manager of a microfinance organization;
  • Signing a loan agreement and receiving money on your credit card.

After receiving the money, you can immediately use them; there is no need for you to report on how you are going to use a loan.

What is the Interest Rate of a Small Loan?

As a general rule, the interest rate on small loans ranges from 0.01% to 5% per day. You can calculate the amount to be returned in a special form on the official website of each company before submitting the application.