Young people who recently celebrated their 18th birthday are ambitious, they want to get everything in one moment. Most purchases do not have enough funds and parents can not always provide financial support. At this time, many people decide to apply for a loan. But it’s not that simple.
Many young people will be disappointed here. Almost all banks will be refused since such organizations prefer to work with citizens who have a permanent job and can confirm their income with official documents.
Where can I find funds for my needs?
After receiving a refusal from one bank, many young people try to find a lender who will still agree to conclude a deal. Find a lender that will go to conclude, it is sufficient for itself, a risky contract, among microfinance institutions. These organizations have recently appeared in great numbers, and among them you can easily find those that will go on lending to eighteen-year-olds.
Applying to the MFI will be an ideal solution for young people involved in seasonal work, having their own small business, working only in their free time from school, etc. The advantage of such lending is that there is no need to provide collateral to the lender: neither sureties nor collateral (which most young people do not yet have) will be required.
Another advantage of making such a loan is the minimum set of securities and the speed of the transaction.
Such offers sound tempting, but you should not immediately sign the contract. It is necessary to conduct a thorough study of the paper with the specified percentage and other conditions.
Conditions for lending to young people in MFIs
Microfinance organizations agree to give eighteen-year-olds only small loans and for a short period of time. The maximum term of such a loan is 12 months. The minimum loan can be obtained for 4 months. Depending on the needs of young people can take from 5 to 30 thousand dollars.
This loan option will be an excellent solution for girls and boys when they are temporarily unable to work (they were dismissed or do not have enough time for part-time work during the session), in cases when you can earn a small amount, but you want to please yourself with a serious purchase (for example, to buy electronics or small appliances).
Before you go for a loan to an MFI, you should understand that such organizations lend money at a serious interest rate. The rate is always several times higher than in the bank. The accrual of interest is also special. In the loan agreement, the bank specifies the amount of the annual rate. microfinance organizations write a rate that is calculated once a week, and often every day.
With long terms, the overpayment on the loan is very large, and therefore loans from such organizations are best issued for a short time and only in extreme cases, because these loans are most often the cause of debt accumulation and litigation.