The Requisites for the Private Loan Options
The loan data show that the beneficiaries who have chosen a company (14% of all beneficiaries) from whom they have already taken credit have done so because they have good past experience (53%). Often, the relevant institutions provide significantly easier application conditions and procedures when the client has a loan in the same company that he regularly serviced.
The other half chooses a company where they receive loyalty program bonuses (43%). This program is designed for loyal customers who earn bonus points with every new credit.
Other answers to the determining factor in choosing a loan are:
- the private loan is interest-free for a fixed period
- a combination of loyalty program and good past experience
- total cost of the loan
Another important factor in choosing a bid among those who have stated that they have received an attractive offer is related to the provision of better terms than the standard terms. According to almost 80% of those with fast credit, what attracted them was the granting of preferential terms.
Survey data show that fast loans are mostly drawn to cover unforeseen expenses (43%). Consumers who have taken out a loan to cover (refinance) old liabilities are 16% and those who have used the loan amount to buy goods are 12%.
- How consumers choose a quote and how they evaluate the information they provide when applying for a loan are among the main factors for consumers’ educational attainment. The data shows that it is most important for consumers to receive information on the size and number of loan instalments before applying (88% of all who have estimated the size and number of instalments).
- Their behaviour is most likely provoked by the fact that the amount of the contribution serves as a guideline for them, taking into account the income they receive. Of course, this information is important, but it cannot give the real price of the loan. Typically, this price is reflected by the amount of Annual Cost Percentage (APR).
However, following the changes to the Consumer Credit Act (CPC) since the end of July 2014, APR does not play a role in quick loans as it does not show the total costs paid by the consumer. This indicator ranks fourth in importance when receiving prior information from the user, after the amount and number of contributions, interest and fees.
Here’s how the respondents rank the information the lender provides to them.
They consider the following information as very important:
- The amount and number of contributions
- Annual percentage rate of charge
- Product presentation
Following the changes in the Consumer Credit Act, which set the ceiling on the Annual Percentage of Loan Spending, additional guarantees such as a guarantor / guarantor, bank guarantee, higher incomes, etc. became popular with fast loans. Such risk collateral is required by fast-track companies to provide Law-compliant financing. It is for this reason that in the study we asked what the loan security was for those who had one.
80% replied that their loan was without security (guarantor). This is perfectly normal, as clients have a number of difficulties in securing additional collateral. Only 17% have secured a bank guarantee and a guarantor / guarantor on their loan. The majority of those who were required to have a guarantee or bank guarantee stated that their lender had asked them to pay an additional fee (68%).