In America, citizens are ambivalent about payday loans. Some consider them a good way to quickly find funds, others consider them unacceptable. Here, they are mainly aimed at borrowers who, for one reason or another, are not able to apply to the bank for a regular loan. By the way, the interest rate on them is 3 – 4%.
In the US, clients of local MFIs are individuals who have no credit history at all or have a very short credit history. Such types of loans are also very popular with small businesses, which account for a significant share of all clients. Businesses simply have nowhere else to find funding and they come to such companies for quick money.
How much money can an American take?
Over 400,000 urgent loans are issued in America every day, these are huge numbers. The reason MFIs flourishes because people have a habit of buying all goods and services on credit, from grocery shopping to sea cruises. Therefore, it is easier for them to borrow funds from online lenders. According to polls, the average borrower takes over 10 loans a year, and the interest on them exceeds 2000% per annum. Clients are mostly people aged 30-40, for example, migrants who have recently lived in a country with an annual income of less than $60,000 and small businesses that take money to buy household equipment or office supplies.
The maximum loan amount in the United States for businesses is $ 50,000, and the average loan size is about $ 15,000. As for the citizens, the average amount is about $ 3,000-5,000.
If to speak about how to get money, then the methods are similar to ours. There are a huge number of small branches and offices of different companies all over the country. Someone covers the market throughout the United States, and someone works in one state or city. If you walk along the streets of Los Angeles, for example, you can see a lot of signs with similar inscriptions payday loan, daily loan and the like. But there are also many sites through which people fill out applications online, just like Payday Loans No Credit Check, they are transferred funds to their cerdit cards.
Types of loans
General types of micro loans:
- PDL (PayDay Loans) – short-term loans;
- POS (Point of Sale) – loans at points of sale, from several months to a year or two;
- Installments are usually long-term, with repayment in equal installments throughout the entire term.
By the method of issuance, loans are distinguished:
- in cash – the issuance of the loan amount through the lender’s cash desk;
- to a card – money is transferred to the specified details of the card account;
- through payment systems – the most popular PayPal system;
- to a current bank account for the convenience of borrowers.
By the way of provision:
- unsecured – for the purchase of goods or payment for services. For example, to purchase furniture or equipment, to pay for studies or special events, for treatment;
- under someone’s guarantee – a separate agreement is signed with the secure (relatives or third parties can act);
- secured – lending with the provision of collateral (except for residential real estate, the use of which as collateral is prohibited by law). The pledge or surety will be the guarantor of the loan repayment. As a rule, they are issued upon agreement of an increased loan amount for a long period.
By payment method:
- annuity – repayment in equal installments every month;
- differentiated – interest is calculated on the debt balance.
By the way of registration:
- online loans – the entire registration procedure from submitting an application to transferring the loan amount occurs via the Internet at any time of the day;
- classic – issued in the MFO office with the personal presence of the borrower.
Online loans without collateral and security take the lead.