In Ukraine, the most popular and sought-after type of lending is consumer. The basic needs for obtaining a loan are the purchase of an apartment, a car, household appliances or other material assets, which require a large amount of money. For these needs, there are many offers from financial institutions. If you need days to pay for a child’s studies, to make repairs, to go on vacation, or just urgently need a cash loan for other needs, then you need a targeted consumer loan. For a consumer loan, it is generally necessary to prepare a minimum of documents. But it is worth considering the factor, the less documentation will be requested from you and the less time spent on obtaining the loan itself, the higher the interest rate. This is especially true for express lending,
When signing up for express lending, you should be informed that the real rates of such a loan can easily rise to 50%. Financial institutions justify such overstated rates by the great risk of this type of loan.
In the decision-making procedure on granting a loan to a borrower, banks apply credit scoring; this is a system by which they evaluate the creditworthiness (credit risks) of a client, which is based on statistical methods.
Scoring allows you to assess the credit risks of a bank for a specific person in a short period of time. This system is used more often in consumer lending. The purpose of credit scoring is to assess the borrower, the likelihood of fraud, the risks of default. The program analyzes the previous lending experience, if any, the personal data of the borrower, macro- and microeconomic characteristics, and accrues certain points according to the established standards, that is, the assessment of the person whose properties determine whether the loan will be granted or not will be provided.
Previously, banks in consumer lending sometimes did not pay much attention to the obvious shortcomings of borrowers, since losses from non-repayment of loan amounts were added to the interest rate of the loan. In other words, bona fide customers overpaid for themselves, for fraudsters and those who really, for good reason, cannot repay the loan. At the moment, the situation has changed tremendously. Banks and credit organizations apply more stringent credit policies. For example, many people will be distrustful of people with such specialties as a journalist and lawyer, and it is also more difficult for a woman to take a loan than a man.
And on the other hand, the lender needs highly motivated potential borrowers. Therefore, a single woman who has a child and who rents an apartment will become a welcome borrower for the bank.
The scoring system is in many respects built, it can be said, on trust, because, nevertheless, it evaluates personal data, which, in most cases, are not verified. But to get a lot of credit money, for example, mortgage loans, credit organizations use other, more stringent methods of checking the creditworthiness of a potential borrower. It is worth noting that information such as mental illness, criminal record, or other personal data is classified information. But professional bank security services will be able to get it without any problems. And if, something is not entirely correct with your past, the banking structure will refuse you under any other pretext and without explanation.