An online loan is a loan through the credit institution’s website. A loan without a certificate of income on the card is issued as soon as possible. To receive money, you need to register on the website of the financial institution, fill out an application form and wait for a decision. It should display the following information:
- Contact details for communication;
- The amount of the desired loan and the term of its repayment are indicated;
- Passport data and method of obtaining money.
The main sphere of banking activity – lending, in particular for consumer needs – actually has no special legislative support. Second, the rapid increase of online loans for bad credit is accompanied by an increase in risks on consumer loans. Thus, in the simplified loan procedure, the assessment of the creditworthiness of individual borrowers is mostly formal, sporadic, or not performed at all.
Third, the growth of loans to individuals in foreign currency creates additional credit risks for banking institutions, as the majority of the population that received loans does not have a steady income in foreign currency (in case of adverse changes in the hryvnia exchange rate) may be insolvent. timely fulfill its obligations to banks. Alternative types of credit collateral include opening of targeted savings accounts, pledge of assets, assignment of rights under contracts, etc.
Fourth, the lack of economically sound interest rate policy. Thus, in our opinion, despite the high volume of consumer lending, the level of interest rates, especially on mortgage loans, remains high, which is dictated by the risk of non-repayment of loans. Fifth, non-compliance with the principles of bank lending, in particular, difficulties in securing repayment, the use of cash in the issuance and repayment of loans, the frequency of misuse of loans, or late repayment of debts to the bank.