Just a few years ago, the only solutions to request a quick payday loan where to go to a traditional bank or unethical sources of financing. However, the former traditionally had highly stringent concession criteria, so it was not always possible to use them. In addition, the alternatives were often not a good choice, since fraud cases abounded or even situations in which our physical integrity could be affected in case of late payments.
However, all this has been changing since, as people’s demand has increased, new types of entities have come up to request a loan. Thus, we currently have a wide variety of alternatives depending on our situation and our needs, all of them with their own characteristics, advantages and weak points. Do you want to know them? Well, let’s do it!
Private lenders without requirements
Let’s start with one of the categories that we should be most suspicious of. They are characterized by specializing in personal loans between individuals, usually imposing excessively absolutely abusive conditions, which can sometimes go even beyond usury.
Therefore, if we are going to go to a particular lender, it is essential that we first make sure how they operate and, if they just ask us for requirements to grant us the loan, the identity verification processes are not very precise or do not bother to analyze our ability to return the money, it’s time to be alert.
Sometimes, these types of lenders will ask us for a guarantee, such as a property or a vehicle. In that case, we will have to be aware that a delay in payment can cause us to lose to our house. Likewise, there are some lenders who operate outside the law, so before signing anything, we must ensure that your business is legal or we will be totally defenseless when reporting an abusive situation.
If, on the other hand, we decide to go to an individual lender regulated by the Bank of Spain that operates legally, it is very possible that we have to guarantee with our house, our car or, even, with the assets of a family member or friend. These lenders often impose conditions that make it very difficult to repay the loan, so they may not only be a problem for us, but also for our loved ones.
Fortunately, as we said, the emergence of serious and solvent alternative sources of financing to turn to in case of specific need makes the figure of the private lender has lost the meaning that it could have had at the time and is less and less frequent. These lenders are less and less necessary since we have many more alternatives to which we can go in case of need.
Traditional banking entities
This is one of the most common and well-known options. If we have a bank account, and our financial situation is very good and we have a long enough credit history, it is good enough, we can apply for a bank loan. Thus, it is usually a regular resource in the event that we need liquidity for our company or if we want to buy a new home.
However, these types of loans are not always the best option, mainly for two reasons:
- Very demanding criteria: The criteria for granting banks are usually much stricter than those of other types of entities. Thus, if our economic situation is not very good, if we are experiencing temporary difficulties, for example, it is very possible that we will be denied credit and we will have to look for other alternatives. It is important to understand that the fact that a bank does not grant us a loan does not mean that our situation discourages it, but that banks usually keep their backs, do not usually take risks, and will only grant them to people with a very specific financial situation.
- Slow granting: On many occasions, when we decide to submit a loan application, it is not because our situation is difficult, but because we urgently need liquidity to make a payment as soon as possible. Banks, however, tend to be relatively slow to grant loans, since they need time before, through traditional mechanisms, to obtain the validation of all our information to decide if we meet the necessary requirements for the granting of credit. analyze our situation and see if we meet your requirements.
Online credit institutions
In this type of company is Credit. They are companies specialized in online lending and have been appearing in recent years thanks, above all, to the arrival of Good Finance companies that, with their technology, have allowed democratizing access to financing services in a quick and easy way.
These companies are the ones that have made it most easy for us all to apply for loans and credits online, adapting their services to our needs. They are regulated on the basis of Law 16/2011 on consumer credit contracts and act under the supervision of the regional consumer authorities.
Furthermore, in the case of Good Credit, for example in the case of Good Credit we belong to an international group present in 11 countries and listed on the London Stock Exchange. For this reason, we also have to comply with other requirements during the process of customer identification, fraud protection, and money laundering.
This type of entities, and, unlike traditional banking entities, have the following several advantages:
- Immediacy: One of the main characteristics of this type of company is that they are able to grant us a loan with great agility and speed, something that, on many occasions, is very important to undertake urgent payments. In fact, thanks to their technology, they are able to quickly analyze our situation, find the best loans for us and transfer the money to us in just 15 minutes.
- Accessible: As we said before, companies like Good Credit have democratized access to credit, since they do not impose such strict concession criteria. Thus, they will analyze our situation and our ability to borrow to design the best product and, thus, allow us to have extra money without uncomfortable questions.
- Flexible: Thanks to Good Finance technology, these types of companies make the most flexible products available to us, such as the Good Credit line of credit. With it, we can have up to $ 5,000 to use whenever we want, paying only for the money we use. In this way, this product is used as an extra mattress that will give us more freedom in our day to day when it comes to managing the loan.
- Security: With its online technology, this type of entity allows to combat fraud and scam, as well as identity theft crimes. In addition, they are subject to the law, so they operate according to a legal framework that guarantees the safety and protection of users. In the case of For example, at Good Credit, we are partners of the Association against Fraud, since we want to be an active part in the fight and prevention against fraud.
Of course, within these types of companies, we can also find thousands of pages of loans from entities of all kinds. For this reason, we always recommend that, before contracting a loan, you review whether the company complies with the principles of going to those who practice responsible lending since that will ensure that they offer ethical, flexible, transparent and responsible credits. We recommend that before hiring you to check if they comply with those principles.