Alternatives to Bank Loans

What is a bad bank and what are the alternatives to bank lending ?

As a rule, obtaining a loan from a bank is far from always as simple and easy as in advertising. There are many shortcomings and they are all known:

• Complexity of registration - sometimes it is required to collect a lot of references, it takes a very long time to issue a loan
• You need confirmation of earnings - if you work as a private taxi driver, then you can forget about the loan in the bank. For banks necessarily official confirmation of earnings, which can provide far from all
• Banks are not ready to work with "risky" clients - if you are an individual entrepreneur or co-owner of a business, for a bank you fall into a risk zone and it becomes almost impossible to get a loan
• Age restrictions - age restrictions are a very big problem. For example, if you are younger than 23 years old or older than 65, then you can hardly get a loan
• Long decision-making - sometimes, especially with large amounts, banks take a very long time to issue a loan. So go to the bank, when money is needed "yesterday" - risky. You can refuse, but time has already been spent.
• Scoring - when a bank starts to "process" a new customer, there is a "black box" (scoring system) that provides a solution (refusal / approval) at the output. For example, for many scoring systems, the absence of a home phone is the reason for refusal (although many simply do not use them), or if you have allowed a delay in the loan for a mobile phone, accidentally underpaying 20 rubles, the scoring machine will refuse! After all, you have a "negative" credit history ...

Obviously, not everyone can cooperate fruitfully with banks. In connection with this, the lending market, which is altruistic to the banking sector , is currently actively developing.

Where to turn? Alternatives to bank lending

What are the alternatives to the bank and how do they differ?

1. Private loan - go to any site ads, enter into the search for "private loan" and see a lot of ads - Dame money loaned at interest. These are loans from usurers. You can address them only as a last resort, if you have no more money to get. The disadvantages of such loans are:

• Huge percentage
• Legal "opacity" of the transaction
• If you can not pay the debt, it is likely to be buried in the Khimki fox (exaggerate)

But there are also a number of advantages:

• A loan can be received by everyone
• The loan is issued very quickly

2. Microfinance institutions (MFIs) - a novelty for the Russian market. On June 8, 2010, the State Duma of the Russian Federation adopted Law No. 151-FZ "On Microfinance Activities and Microfinance Organizations". The main objectives of microfinance organizations are "to provide small business entities and individuals with limited access to traditional banking services, financial and complementary services aimed at reducing the social inequalities in society, developing private entrepreneurship, improving the living standards of the population, Ensuring employment. "

From the above paragraph it is clear that microfinance organizations are a legally fixed alternative to the bank. The main disadvantages of MFIs:

• The amount of the loan can be no more than 1 million rubles
• Percentage is higher than the banking
• Not all MFIs are reliable

Pros of MFIs:

• MFOs are regulated by the FSFM, i.e. Relations between borrowers and creditors are controlled by the state
• The percentage is much lower than that of usurers
• Legal "transparency" and "cleanliness" of the transaction
• Get a loan in an MFI is much easier than in a bank. MFIs have much more loyal criteria for assessing borrowers, and loan applications are considered very quickly

Attention! Not all organizations that impersonate MFIs are such. Before applying to the MFI, I advise you to find out whether it is in the register of the FSFM. The FSFM register is publicly available and is located at: http://www.fcsm.ru/ru/contributors/microfinance_org/state_register_microfinance_org/

As MFIs are still little known, there is a small list where you can contact:

1. "Loans to pay" - it's loans up to 50 000 rubles. The percentage of them is very large, but just get it and just return it. In my opinion, the most acceptable conditions for the following companies:

A) Domestic money - it's convenient that the company's managers serve customers at home, do not have to go anywhere.

B) Mini Money (working in Moscow and St. Petersburg) - the most "adequate" interest.

2. Large loans - loans from 50 000 rubles and more. As a rule, interest on them is closer to banking, but the conditions are less loyal than in "loans to pay". For such loans, the most convenient for me seemed to work with the following companies:

A) Group of Companies AEK (working only in Moscow and Moscow region) is a very good company with a good reputation. The only negative - you can get only a loan secured by a car. Website: http://aecgroup.ru/

B) Finotdel - loans only for business, but you can get without bail.

3. Credit Consumer Cooperative (CCP) - unfortunately, I have little knowledge of the specifics of the CCP market, so I do not want to write unverified information here. Soon I'm going to clarify this issue in more detail and write a separate article about the CCP.

4. Pawnshop

The good old pawnshop is known to everyone, so I will not go into details. In a pawnshop you can easily get any amount of money, but you will have to leave your property. To buy back the property, you will have to pay a fairly high interest.

Good luck and see you again!