Microcredits are extremely popular among American households. People take payday loans frequently during the lifetime. They are cheap and easy to return. If a person wants to get real benefits from taking a payday loan, he/she has to stick to the loan agreement. This is a key document that determines when the microcredit has to be returned.
Taking a Microcredit in a Correct Way
Microcredits are very special types of credits. This financial product has many characteristics. Here are the main ones:
- A body of a loan has to be returned in two weeks. The term of loan return can fluctuate. It depends on negotiations between a borrower and a lending company. If a person returns a microcredit too late, it will become very expensive. A person will have to pay a body of a credit, commissions, and fine. There is no point in paying too much for a microcredit.
- A person can not get a too big loan. Compared to long-term credits, a sum of a microcredit is relatively low. The average microcredit distributed in the US is 600 US dollars. Because a sum of a credit is low, financial institutions ask for the very low interest rate. That is why one should not ask for a maximum loan amount. If it happens, the interest will grow.
These two characteristics clearly show the key benefits using a microcredit. If a person returns a credit in time the loan will be very beneficial. It is good to take several microcredits one after another. The total interest rate will be lower than in case of a long-term loan.
What Clauses Can Be Negotiated with Financial Companies
A loan agreement is concluded with every client. In the majority of cases, it is possible to negotiate with lending companies. If a person negotiates some clauses of it, a credit will become even more beneficial. Here are the main clauses that can be discussed with a lender:
- Documents to present. There are several documents that a borrower has to present. They all will form a legal basis to issue an agreement and will be indicated in the loan agreement. Some documents are not that easy to get. If a person lacks an income statement or employment contract, he/she can substitute them. A friend or a relative can write a guarantee and credit will be covered by him/her, in case microcredit will not be covered by the main borrower.
- Date of microcredit return. Many financial institutions are open to negotiations on this topic. Borrowers aim to return a credit as late as possible. That is not a right approach. If a borrower asks to postpone a date of microcredit return, a lending company will ask for a bigger interest rate.
These are the main things a borrower can negotiate with a lending company. If a person negotiates terms and conditions of a loan agreement, microcrediting will become even more beneficial. It is important to choose a lending company that is open to negotiations.