The credit market is basically divided between finalized loans and unfinalized personal loans : the first are loans raised at retailers of goods and services for the purpose of delaying payment over time, in which the retailer offers his customers a purchase of the goods in installments receiving a commission or commission for the business of procuring customers from the financial company, so that the amount of the loan is paid not to the customer, but to the retailer himself, and to proceed with the provision of consumer credit must specify the motivation for to which this sum is requested.
On the other hand, non-finalized personal loans are loans whose amount is paid directly to the customer by any credit institution, and no specific reasoning is required as the loan is not subordinated to the purchase of a specific good or service.
- Personal loans not finalized: the documentation
- Provision of non-finalized personal loans
- Personal loans without motivation
- Loans finalized or not finalized, what to choose?
- Personal loans not finalized: the advantages
- Unfinalized personal loans: the disadvantages
- The refund
- Unfinalized personal loans, costs and ancillary costs
- Personal loans not finalized: the assignment of the fifth
- Solutions for students
- Credit solutions for retired people
Personal loans not finalized: the documentation
In order to obtain an unfinalized personal loan, you need to go to a bank or a financial company, or send the request directly online, presenting as documentation
copy of the identity document, tax code and proof of income through the last two pay slips or a copy of the 730 for workers, and pension slip for those receiving a social security allowance.
This is the documentation usually requested, but in the individual specific cases due to particular financial and financial situations, additional additional documentation may be required , such as the presence of a third party guarantor or other forms of guarantee to obtain the go-ahead for financing.
Provision of non-finalized personal loans
Loans that are not finalized are therefore a form of financing granted by banks and financial institutions to customers without the disbursement being in any way dependent on the purchase of a specific good or service at a partner retailer. This involves that
the money is paid by the bank directly to the customer, by a bank check or credited to the personal bank account , and the beneficiary, once the desired amount is obtained, can have it in total autonomy for their own needs, in most cases without any restrictions.
Personal loans without motivation
Although there is no contractual link between the financing and the purchase of goods, unlike the so-called consumer credit, even non-finalized personal loans can provide for different purposes of expenditure that serve the financial company to make a preliminary assessment of the size of the loan. amount requested and how much actually obtainable from the applicant, as well as on the duration of the amortization plan. This means that, even if the customer has the autonomous sum granted, the customer at the time of filing the application may have to specify how the money obtained will be used.
This preliminary information, however, also has a positive implication for the applicant, as it can be the flywheel to enjoy favorable conditions on specific spending projects .
Just to give examples, apply for a non-finalized loan for home renovation purposes that allows higher amounts and longer durations compared to the motivation to spend trips and holidays, renewing the energy system of the house can mean obtaining tax deductions provided by the government, or the same loan is not finalized for students who have to complete the courses or for young people under 35 who want to give life to a start up could receive easier conditions than maybe a 50-year-old professional who has to organize his daughter’s wedding.
Loans finalized or not finalized, what to choose?
So, loans finalized or not finalized ? What to choose? It goes without saying that the choice must fall on one or the other depending on the individual cases and their needs. It is clear that if, for example, you have to buy a new dishwasher, a finalized loan is the most convenient and convenient solution. In other cases, the choice between a finalized loan and an unfinalized loan is at the discretion of the client, as in the eventuality of the purchase of a car, where the buyer can take advantage of the financing offered directly by the car dealer, how much to contact himself to a financial company to get the necessary amount and subsequently pay the car to the dealer in a single solution. Addressing a credit institution can, for example, allow for those who have the possibility of obtaining more credit than they owe, and thus succeed, to return to the example mentioned, to purchase the car and at the same time satisfy other needs, for example a holiday, which obviously could not be done with a loan. However, like any form of financing, even unfinalized personal loans have advantages and disadvantages .
Personal loans not finalized: the advantages
Here are the advantages of unfinalized personal loans summarized in these main points:
- Money paid directly to your current account
- Lighter approval process with fast waiting times
- Wide choice between banks and different financial companies from which comparison can be drawn more convenient proposals
- Possibility to dispose of the sum chosen as best, without having to specify any reasons
Unfinalized personal loans: the disadvantages
However, even non-finalized personal loans may have disadvantages , in particular:
- Higher interest rates, due to the absence of material assets contractually provided as collateral
- Uncertainty about approval due to lack of collateral. The feasibility assessment of the loan is linked to the creditworthiness and the degree of indebtedness of the applicant.
How does the repayment of unfinalized personal loans work ? When signing the contract with the credit institution or financial company, the applicant can choose the preferred payment method: usually
the reimbursement of the monthly payment is made through the payment of bills to Swiss Post or at the affiliated tobacconists, or through direct deduction from the current account, a formula that is for example associated with personal loans with assignment of the fifth .
Another aspect to be agreed with the bank, strictly correlated with the times and methods of the sum to be repaid, is the duration of the amortization plan, which usually varies from 12 to 120 months: the more the repayment is delayed over time, the lower is the amount of the monthly payment, and therefore it is very important for the beneficiary of the financing to choose a duration suitable for their needs and financial resources, within the range proposed by the bank itself.
Unfinalized personal loans, costs and ancillary costs
To know the cost of a personal loan , two indicators must be taken into account,
the TAN , the nominal annual rate, which corresponds to the interest rate applied to the sum lent, ie how much must be returned to the institution of credit on duty in addition to the amount disbursed, and the APR , the Annual Effective Annual Rate, which includes all expenses and the tax burdens included, such as the costs of opening and early repayment of the loan, or communication costs.
The accessory expenses also include insurance costs , compulsory or optional, related to the loan: these are life insurance policies or loans, with which the lender guarantees the repayment of the capital in the event of insolvency due to anticipated death, temporary or permanent disability, loss of the workplace. Other possible expenses that can be included in the cost calculation are those of the bank charges for the automatic debit service on the current account or for the postal order, and the cost of production and sending of the bank statement . Some of these expenses may be borne by the bank itself, you must read well the loan conditions provided in the offer and any changes over time at the time the contract is signed.
Personal loans not finalized: the assignment of the fifth
A particular type of personal loans that are not finalized are those that provide as a repayment method the assignment of the fifth of the salary or social security. What is the sale of the fifth? The peculiar characteristic is that
the credit institution with which the loan is signed withholds directly the amount of the monthly repayment installment, which can reach a maximum of 20 percent of the salary or pension income received by the beneficiary, equal to one fifth of the total amount.
The advantages of the transfer of the fifth option are essentially due to the fact that such unfinished personal loans are also open to those who are likely to be refused funding , such as the protested and bad payers, being the assignment of the fifth agreed directly between the bank and the employer. However, in order to have the go-ahead for the assignment of the fifth, it is necessary to have a sufficiently high income to support the deduction of the monthly payment, and a permanent or fixed-term employment contract provided that the employment contract has the same duration as the financing.
Solutions for students
Non-finalized personal loans are potentially open to any category of subjects, but credit institutions tend to reserve for certain specific segments of the company loans at particularly advantageous conditions: it is the case of student loans to support university expenses or for those who must carry out a master’s degree or a particular specialization course. There are two forms of funding for students: the first is a personal loan ,
which provides for the typical characteristics that we have already analyzed for a non-finalized loan, namely the provision of the sum on the student’s current account and a repayment plan through monthly installments and variable duration depending on the amount.
Depending on the bank you are targeting, there are additional useful services such as the possibility of skipping an installment or changing the amount, or facilities such as the reduction of ancillary costs. The government itself has planned a series of dedicated initiatives over the years that offers the possibility for young students to apply for facilitated loans through a specific guarantee fund with which the State protects the student by providing coverage on half of the amounts paid, while the part remaining is guaranteed by the participating banks.
The second student loan formula is the so-called honor loan , related to the student’s academic performance. This loan is different from normal non-finalized loans, as the result of agreements between the university and the bank that allocates the sum according to certain educational requirements that must be reached in order to obtain the loan, and set by the university itself.
The credit institute finances the entire course and also the costs of transfer, board and lodging in the case of an off-site student, by paying the loan in installments. Another peculiarity of this particular loan is that the repayment period does not start immediately at the end of the financed course, but there is a “bridge period” during which the student can have the time necessary to find a job and start to perceive a income with which to repay the loan.
Credit solutions for retired people
Among the beneficiaries of non-finalized loans are also pensioners , who can enjoy a fixed income and favorable conditions for reimbursement through INPS and the other former institutions absorbed by Inps since 2011, such as the Inpdap reserved for those who were public sector employees. Generally, the preferred formula for personal loans to pensioners is the transfer of the fifth , with the compulsory subscription of a life insurance policy to protect both the bank and the beneficiaries’ heirs in the event of early death. There may be restrictions on the provision of personal loans not aimed at retirees , linked to such situations:
- Minimum pension
- Disability pension
- Reversibility pension
- Other loans in progress
- Retired people over 75 years of age
In these cases, where the assessments vary according to the individual case, it is possible in case of denial of the finance company to resort to alternative financing routes, from online private loans to bank life annuity: in any case it is advisable to contact a financial consultant to search together for the best solution.
We have broadly seen how an unfinalized personal loan works , which undoubtedly presents itself as the preferred tool for any subject so that he can obtain a sum of money necessary to satisfy his needs without being subordinated to a specific motivation. There are many variations of this type of financing, and therefore it is advisable, taking advantage of the online comparison tools, to analyze more estimates before making the final choice, and in case of special conditions related to their income situation, or other sensitive issues of an economic-financial nature, it is advisable to contact a financial consultant who can guide the applicant towards the best possible solution for his needs.