1, the application threshold is low. Compared with picky banks, it is much more approachable. Some borrowers with low income or salary in the form of cash payment (which can provide self-help for 3-6 months) can apply for loans directly through small loan companies.

2. The lending speed is fast. The bank's audit process is strict and complicated, while the lending institution is the opposite, and its high efficiency undoubtedly improves the lending speed. So friends who are in urgent need of money can consider applying for loans from such institutions.

3. Lending information will not be included in the credit information system. Although the credit information system is becoming more and more mature, it still needs to be improved. The reason is that all credit transactions between borrowers and lending institutions other than banks will not be recorded in the credit information system, and naturally they will not be reflected in the credit information report. This means that the borrower's debt situation and overdue behavior not only enjoy full "privacy", but also help the borrower to borrow from other institutions again.

Disadvantages of microfinance

1, the loan cost is high. Due to the low application threshold, small loan companies naturally bear relatively large loan risks. In the loan industry where risks are turned into profits, the interest charged will naturally be higher than that of banks. However, it is worth noting that the charging standards among small loan companies will also be different, and shopping around is still king for borrowers.

2. There are many loan scams. In the mixed unsecured loan market, many criminals wearing the "coat" of small loan companies cheat borrowers who are in a hurry to use money. Generally speaking, 80% of lending institutions will require borrowers to repay in advance in the name of collecting deposits, handling fees and interest. But in fact, regular small loan companies will start charging related fees in the first month after the loan is successful.