Personal unsecured loans require the borrower to have good credit standing, stable repayment ability, etc. But even if these conditions are met, can the loan be successfully obtained? In fact, no, you still need to have a pair of eyes to distinguish between true and false. Various lending institutions appear on the streets. How to distinguish formal lending institutions from informal institutions? The editor below will tell you about the characteristics of informal and formal lending institutions.

1. Characteristics of informal lending institutions

1. Simple contact information

Formal lending institutions have fixed business locations and contact information, while informal lending institutions have fixed business locations and contact information. Most lending institutions generally only have a mobile phone number or QQ number and will not leave a fixed landline number, so pay attention to the institution's contact information.

2. Can be accepted all over the country

Formal lending institutions only handle local business, which is conducive to controlling credit risks, while informal institutions generally claim to "can handle nationwide business". This is probably a way for them to cheat in other places, so you should pay more attention to this matter.

3. The interest rate is too low

The interest rates of informal lending institutions are generally very low, but in fact, although the threshold for unsecured loans is low, the interest rates are not low because the lending institutions issue Unsecured loans require higher loan risks. In order to control this risk, loan costs will increase, so lending institutions with interest rates that are too low must be careful.

4. Pre-loan charges

Formal lending institutions will not require borrowers to pay any fees before disbursing money, but informal institutions are likely to charge borrowers with various reasons before disbursing money. There are fees, so if the lender you are looking for requires you to pay a fee before borrowing, be cautious.

2. Characteristics of formal lending institutions

1. Carefully inquire about personal qualifications

Since unsecured loans are based on the lending institution’s trust in personal qualifications only As for the loans granted, the repayment ability and willingness to repay will be mainly assessed. For example, the lending institution will inquire in detail about a series of questions such as the nature of your business, your income status, credit situation, and the amount of loan required to judge your qualifications.

2. Actively invite the borrower to meet and discuss in detail

If you meet the application conditions, the lending institution will make an appointment with you for further communication and invite you to submit application materials and interview for a loan. In terms of contracts and other aspects, they will be happy to display the organization's information in front of you, unlike informal organizations that hide it.

3. No fees will be charged before the loan.

Any formal lending institution will start accruing interest and charges after the loan is disbursed, and will never charge you before the loan is disbursed. There are various fees. If a lending institution requires you to pay fees before borrowing, it is not a formal institution.

4. Risk-taking and returns complement each other

“High risks often mean high returns.” We often see that institutions with lower application thresholds bear higher lending risks. Larger ones tend to charge higher interest rates, and vice versa. So if it is a "low threshold, low interest" lending institution, it should not be a formal institution.

The above are the characteristics of formal lending institutions and informal lending institutions that the editor has compiled for you. I hope it can help you.

(The above answers were published on 2015-10-09, please refer to the actual current relevant home purchase policies)

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