How to choose an MFI and get a guaranteed microloan
Microloans are the fastest way to get money without proof of income. Money is transferred to a bank card or electronic wallet of the client 15-20 minutes after the application is submitted. MFIs specialize in issuing loans – microfinance organizations that work with money, but MFIs cannot be called a bank. And before choosing an MFI and getting a microloan, let’s consider why.
Differences between MFIs and banks
Microfinance organizations differ from banks in a limited range of financial products. In MFIs, you can only get a loan, and banks provide loans to people and companies, accept deposits, issue plastic cards, accept utility bills, and sell commemorative coins.
MFI in the eyes of ordinary people is a company where you can quickly get a cash loan. The high speed of providing funds has a significant drawback – a high interest rate on a microloan.
How to choose an MFI
To facilitate the selection of an MFI with suitable conditions, it is enough to use an online loan calculator. The list contains the necessary information for obtaining a microloan:
- interest rate;
- credit limit;
- loan term;
- Required documents;
- the time of consideration of the application;
- button to fill out the form.
How to get a microloan
The borrower will only need a passport, or rather, data. Sometimes they may require a passport photo in electronic form, but this is more the exception than the rule. Passport scans are needed for security reasons to prevent fraudulent transactions with money.
Types of microloans
Most microloans are issued for up to a month, so that the borrower can fully repay the resulting debt from the next salary. Sometimes you can take a loan from an MFI secured by a car or real estate. This significantly reduces the interest rate for the service, but you will have to provide documents for the property. Sometimes you even need to draw up a pledge agreement with a notary.
Where to find interest rate information
Advertising materials indicate the interest rate for one day of using borrowed money. For a borrower, the figure of 0.5-2% looks insignificant, but if we calculate the interest rate in the traditional format for banks in the form of annual interest, we get a number in the amount of 180-700% per annum.