Despite the gradual economic recovery, there are still many Italian families who decide to apply for a loan in the bank to carry out their project , such as renovating their home and buying a new car, or simply to get more liquidity.
We are talking about the so-called consumer credit , a financial product that allows a person, precisely the consumer, to satisfy a certain private need. It is in fact a loan that can be requested only for personal purposes and that therefore concern the family sphere.
What is consumer credit?
Specifically, consumer credit then takes the name of a finalized loan, when the lender pays the sum directly to the seller and when the applicant, to obtain the credit, must specify the use he will make of it later. Instead we talk about personal loan, or not finalized, when instead we can use the requested sum as we believe and without having to justify the end.
Precisely because consumer credit is a rather widespread form of financing, it becomes important to know the ABC, so as to arrive prepared if you decide to request one. Not surprisingly, the publication of the Guide of the Bank of Italy on consumer credit, designed precisely to facilitate the understanding of this issue even to those who are not very familiar with this complex topic, is recent.
In the wake of this initiative, we at SuperMoney have also decided to provide you with some useful tools to move more easily and without risk in the consumer credit sector. So let’s see below what are the factors to watch out for if you are also going to request a loan from your bank.
Consumer credit: distrust of “easy” loans
First of all, you should know that you can generally apply for funding if you are between 18 and 75 years old . However it is worth noting that before granting the loan, the bank will verify the so-called creditworthiness .
In other words, you will have to show the credit institution to be able to repay the loaned capital according to the deadlines agreed upon in the contract. Precisely for this reason it is important to be wary of those who promise “easy” funding to anyone . In this regard, always remember to carefully check the interest rates and ancillary costs reported in the contract so as to avoid encountering nasty surprises.
Consumer credit: learn to read advertisements
Finally, if you intend to apply for a loan, how do you interpret advertising messages? In theory, promotional messages should provide a first orientation to help the consumer select the best credit offers. Unfortunately, too often, it is not so easy to easily evaluate the convenience of financing .
In general, good advertising should indicate:
- Interest rate on an annual basis
- Expenses that determine the total cost of the loan
- Total amount of funding
- Total amount due
- Amount of individual installments
Furthermore, a clearly written announcement should also give the APR the same visibility as all other information , for example by providing a concrete example so that you can understand the characteristics of the credit product more clearly.
Last technical note: finally pay close attention to the advertisements that refer to “zero-interest financing” . In these cases, it is in fact important to always check that not only the TAN but also the APR of the loan is equal to zero .