It's called loan to the financial amount that is given to a person or entity on the condition that it returned with interest and commissions previously agreed.

The personal loans, also known as consumer credit, are those who usually ask a person to cover some expenses at any particular time.

To access them, normally only require personal guarantees, ie the applicant is responsible to the debt with their income and assets. Occasionally, who granted the loan may require that the contract be signed by a notary verify it.

Features

The personal loans are different from other loans that:

·  The amount is usually somewhere between 3,000 and 60,000 € €, but depends on the assurances that the applicant can provide.

·  Your repayment period ranges from one month to five years, although there is growing entities that extend the deadline until 8 years old.

·  Generally, do not require a bank guarantee but is awarded on the basis of personal guarantees.

Parties

Within a personal loan differ two parts: principal and interest. Both represent their full amount. That must be repaid over a period of time previously marked, which is called maturity.

·  Principal: is the amount that the economic entity delivery to the applicant's personal loan.

·  Interest is the amount that the applicant's loan payable to the entity in exchange for having the money. Interest on personal loans are higher than in the mortgage.

Types

Los The personal loans can be classified into two groups based on their time that it takes to get the money and the guarantees required by the entity to ensure recovery of the loan.

You can also distinguish different types of loans, taking into account the interest rate that applies to them can be fixed, variable and mixed.

Quick Loans

Such loans typically are granted by financial intermediaries. The maximum amount that can be ordered at most usually somewhere between 3,000 € and 6,000  €.

Often require minimal personal guarantees and, in return, apply very high interest rates. They can be submitted via the Internet or by telephone.

Guaranteed Loans

Usually the loan amount that can be requested is higher than in the case of loans quickly. In many cases, the amount can be increased to 60,000 euros.

For the most part these loans are granted by financial institutions. They require stricter safeguards as a contract signed by a notary public or an endorsement. The stakes are lower than in the previous case.

Interest rates on loans

The personal loans also can differentiate into three groups according to their interest rate. It distinguishes between personal loans:

·  A fixed rate of interest are those in which the interest rate does not change during the entire term of repayment of the loan.

·  A variable rate are those in which the interest rate changes relative to rises or falls in the benchmark chosen. Generally, the indexes are reviewed on a quarterly, semiannually or annually.

·  A type of joint interest are those in which periods are combined fixed rate periods with a variable rate.

Commissions

he loans guaranteed the customer must pay a series of previous commissions. However, in quick loans are included in the assessments. The committees most common are:

·  Opening Commission: many entities that amount charged to customers when formalizes personal loan. This amount corresponds to the administrative costs and processing.

·  Commission for total or partial cancellation: amount that financial institutions charge a customer when he pays all or part of the credit outstanding personal loan in advance.

·  Commission changing conditions: amount that the finance burden on his client when he performs some reform in the original loan contract. This amount corresponds to the administrative costs generated by the change.

Documentation for applying for a personal loan

In applying for a personal loan to a financial institution, in most cases they require a range of information about the applicant:

·  Personal information:

- A photocopy of the identity card or CIF, as appropriate.

- At times, but is not very common, can apply for a certificate of marital status awarding the Civil Registry.

·  Financial information: depending on whether the customer is employed or self-employed person documentation is often ask is:

- Workers employed: in most cases requested a copy of the last three payroll received a copy of the last two statements of income, proof of other income if anything, and at times also a a copy of the employment contract.

- Self-Worker: in most cases requested a copy of the last two statements of income, proof of income, the final declaration of VAT and the latest personal income tax payments and VAT.

Worth noting

When the sum is needed is economic reduced can be applied to the advancement of payroll or a credit card. The latter offers the possibility that the client ask your financial institution extending the maximum monthly.