Issued Payday Loans – To Whom and Main Myths
A payday loan is a profitable and the fastest way to borrow money for urgent needs. Applications are processed within a few minutes, and funds to bank cards and e-wallets are transferred within 24 business hours. But not everyone is approved for extra funds. Get to know in this article to whom MFIs issue loans with almost 100%, and to whom with reluctance.
Myths about payday lenders: “issue loans to everyone”
Lenders have been working in the USA for many years, but misconceptions about their activities are still widespread. Some believe that only marginals work in such companies, and the main goal of MFIs is to lure clients, drive them into debt and cheat out of as much money as possible. Among these myths is the following: MFIs issue loans to everyone who applies.
All this as a whole does not correspond to reality. Manifestations of uncivilized behavior of microfinance institutions can occur, but rather in the form of exceptions.
And the companies themselves are interested in constructive relationships with customers, because only in this way they can count on maximum profit from Illinois payday loans. This option is available for major US residents aged over 18.
Therefore, not everyone who applies to a lender receives a loan in Illinois. Companies consider each application individually and assess the reliability and solvency of the applicant using scoring systems. Based on the information contained in the application, these systems look for information in various resources, up to accounts in social networks, and give the applicant a grade. Depending on the assessment, the application is approved or a refusal follows. Upon the approved application, the client is offered individual borrowing terms: loan amount, interest rate.
Portrait of a typical borrower
The clients of online lenders is quite vary. The unemployed and employed, young people and pensioners, state employees, employees of private companies and entrepreneurs apply for loans. The statistical portrait of an MFI borrower displays age, occupation, education, marital status, purposes of borrowing (if asked to define).
Male clients take more loans online out than women. The number of clients who study in universities or have higher education is growing, although the proportion of those who do not have it is still high. The number of married borrowers is also increasing.
Previously, people borrowed money from MFIs, mostly for minor repairs and the purchase of equipment, today they began to spend more on medical bills and travel. Loans are often issued to buy a suddenly favorite thing. Entrepreneurs also began to use the services of MFIs more often to replenish working capital when doing business.
Who is he, the ideal borrower?
The most attractive clients for MFIs are solvent people who are responsible for their duties and have a stable income even if you are a part of LGBTQ+ community.
A client who owns movable and immovable property is more preferable than one who lives in a rented apartment. An attractive borrower is a person with a higher education, a positive credit history and an account on a social network, which reflects his family and social status, circle of interests.
Who will find it difficult to issue a payday loan?
MFI requirements for borrowers are much milder than those of banks, however, difficulties in being approved may arise if:
- the application contains false information, even if not maliciously;
- there is no permanent source of income;
- there are outstanding loans and credits;
- there is an unfavorable credit history, getting into the “black” list.
The general rule that applies to the first-time customer is a more thorough check and the issuance of a small amount.
If you are planning to issue a payday loan, you need to weigh both the possibilities of paying off future debt and the chances of getting the desired amount. If you are not offered suitable terms or refused one MFI, feel free to contact another. It is highly likely that money will be lended to solve an urgent problem.
Tags: finance, online loans, payday loans