Competition grows in fast loans
It is becoming easier, get quick money to face an unforeseen event, or take advantage of an opportunity. You just have to do an Internet search to find a long list of websites where you can request a quick loan. The key is knowing how to choose the best option, which will probably depend on the interest rate and credit conditions. Generally, the amount offered by microloan companies does not exceed 600 euros. And in many cases, this amount is reduced by half if it is the first request, and the return period is usually not more than 30 days. It is a new product, non-existent in traditional banking, which has grown as a result of the crisis and the ease of Internet access. According to the Spanish Association of Microloans (AEMIP), the business volume of fast loans is around 200 million euros. Even when it comes to quick and easy loans, not everyone can get the money. In fact, according to the AEMIP, only 50% of applications are approved. Usually, solvency is analyzed through regular income from work or a pension, so that they work as a payroll advance.
The immediacy of the response and the short deadlines entail a greater risk, the counterpart of which is relatively high interest rates. If we use the APR, a common reference in the comparison of loans, it shows values above 4,000%. For this reason, microloan companies go to great lengths to explain that, due to its nature and terms, the APR is not a valid reference for microloans. The competitiveness of the sector is generating a price war. Taking a loan of 300 euros as a reference, the 30-day fees can range between 84 and 111 euros, which represent interest rates between 28% and 37%. The average of the offers compared is 98.27 euros, equivalent to an interest of 32.76%.
What is the profile of the clients of this type of loan?
According to a study by Cashper, it is a mostly male, middle-aged and salaried audience. Specifically, two out of every three people who receive their fast loans are men and the average age is 41 years. 82% of clients are employed, compared to 10% with a retirement pension, 5% with other benefits and 3% of the self-employed. On average, they request a loan of 241 euros and justify an income of 1,310 euros. And in terms of place of residence, Madrid and Catalonia account for 41.7% of customers. Fast loans are still a new product in Spain and there is a certain mistrust in consumers. Contrary to the voices that say that there is no regulation for microloans, they are governed by regulations on consumer credit contracts and on distance marketing of financial services for consumers. In addition, two years ago AEMIP was created, which today brings together more than half of the companies in the sector. This entity has promoted the adoption of a code of good practices, to give greater protection to customers . So from CréditoSí we insist: if you are going to request a mini-credit, do it at a company that is a member of AEMIP. Source: Quick credits, the competition is tightening , La Razón