What types of loans are there in Moldova?

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Each of us may have a situation that requires the immediate injection of additional cash resources. And where to get them, if current working capital is invested in your small business, the next financial income is expected the other day, and money is needed today or is it even very convenient to have it to fix an unforeseen financial hole in the next hour or two? The only solution in this case (if contacting friends / family is not an option for you) is a short-term loan : a personal loan . What types of loans can you find today?

What types of loans are there?

We are used to calling any money loan a "loan," although there are different types of loans. They are classified and named differently, depending on the purpose. There is a mortgage (real estate loan), car loan, cash loan, credit card line, personal loan, etc. A short-term loan for a small amount is called a microcredit.

Where can I quickly get a personal loan? The first thing that comes to mind is a bank, but is that so?

Bank loans

A bank is a financial credit organization licensed by the National Bank of Spain. Banks traditionally inspire more confidence, but it is possible to obtain a loan from them, but, as practice shows, it is not always done quickly. To get a loan, as well as a credit card, you need to visit the branch or submit an online application through the bank's website (but you have to go to the bank in any case to verify identity), fill out many documents and questionnaires in which you need to confirm your official income and employment, indicate a promise and guarantors.

For all types of loans the bank may require additional documents, for example, a statement from the bank that attends the salary account, the notarial certification of the property rights determined in the commitment and much more. Also, your application must undergo a pre-qualification and a rating (with verification of your credit history). And if you have gaps in the supporting documents, your full name is blacklisted by the credit association or RAI, or the bank's risk management considers issuing a loan for some reason (sometimes it is not even directly up to you ) is not reasonable: you will refuse.

Yes, there are cases when, despite all the mentioned disadvantages of the types of loans above in the package of your documents, they still grant a loan, but in practice this is very rare. You will find a similar procedure for almost all types of loans issued by banks. As it is clear from the above, it is impossible to get a quick loan in any way.

Also, banks, in addition to bureaucratic procedures, offer loan rates for a period of one year or more at fairly high interest rates on any type of bank loans. Too often, high interest rates and fees are "hidden" in fees, complex formulas, and clever loan repayment schemes, which are difficult for an unprepared person to understand. Therefore, you need to understand that the types of long-term loans from a bank are not only long, but also very expensive.

Personal loans

The second option is microfinance organizations specializing in types of personal loans (microloans). They have the status of financial (non-bank) companies and their activities are regulated and authorized by law.

When obtaining types of personal loans from a microfinance institution, one does not have to cross office thresholds, compile a folder of documents, or spend a lot of time obtaining financial assistance. The entire issuance procedure takes 15 to 30 minutes. This requires only Internet access, DNI / NIE, as well as a bank card from any Spanish bank. The identity verification and acceptance of the application is carried out, as you already understood, remotely from any place convenient for you, at any time (24/7). What is similar to banks is the requirement to confirm the address of registration (residence) and perhaps indicate a guarantor from the circle of close people.

Microfinance organizations promise to make applying for all types of loans almost instantly (15-30 minutes). In practice, during the time when the bank takes only the simplest first stage, the pre-qualification, the entire procedure for issuing a microcredit is carried out in the microfinance organization.

In case of a successful decision, after 15 minutes, the funds you need will already appear on the bank card specified in the application. As a rule, the issuance of a loan is possible for a period of 1 to 30 days. The disbursement of the first loan, most likely, will be 0% and without commissions. If the term is longer or late, the cost of paying the type of personal loan will be significantly higher than at the bank during the same period.

What are better bank loans or personal loans?

Well, it is impossible to say precisely which type of loan is better because it depends on the purpose of the loans and the desired amount of money to receive. So if a person needs a large sum to buy a house or a car, they certainly have to go directly to the bank. They are engaged in the issuance of mortgages and car loans. Otherwise, if a person needs a small amount of money and quickly, the types of personal loans will work well.

These are the main differences between bank loans and personal loans:

  1. Bank credit

  • Loans are issued in large amounts and long-term (one year or more) and have a special purpose (home or car purchase, student loans).
  • They generally have high interest rates.
  • It involves a long and complicated procedure to issue and verify a borrower.
  1. Personal loans

  • Loans are issued for small amounts (from 300 to 1000 euros) and short terms (from 1 to 30 days).
  • Low rates (for the first loan or the first month of repayment).
  • Quick, simple and remote procedure for registration and issuance. In case of delay, the expenses can be disproportionately higher than bank loans.

At present, borrowing money does not involve excessive efforts, but it all depends on the purpose and the amount of the loan where it is best to request it.

about the author

Maria Solis Burley

Credit consultant in Spain. Financial Analyst at Crédito Victoria.
LAST UPDATED: February 8, 2020