Is a cash loan the right solution for you?
What do you need to consider before applying for a loan?
Do you need to renovate your bathroom, and you want to replace old joinery? Is it time to insulate your walls, purchase a new washing machine and replace a few tiles on the roof of your house? Do you need to pay for your child’s next year at university? It seems as though the bills keep piling up, yet, there isn’t enough money to cover it all. Murphy’s Law.
And while you contemplate where to get the money from, your friend says, nonchalantly to you during coffee one day, that she’s just bought herself a new car. You’re happy for her, but the question remains (as you take your last sip of expresso) – How has she managed to make this purchase, when we have the same salary?!
You’re too proud to ask her, and she’s too shy to tell you. You ask yourself: what’s her secret? An inheritance, a second job? Maybe she’s good at saving money?
Not at all!
The sweet secret behind your friend’s purchase is called – a special-purpose loan.
We at ProCredit call it an investment loan or investment loans for private individuals. The difference in the name dictates the difference in the intent of the loan. Let us explain – if you are going to pay a monthly instalment for something, then it would be a good thing for it to benefit you in some specific way. For instance, the money you invest in a new car, in which you will travel kilometers and kilometers, is an investment worth making. On the other hand, the repayment of a cash loan, over a 3-year period, in order to have fun for 10 days on a beach somewhere seems to been an excessive expense.
Then, you ask yourself, is a cash loan the right solution for you?
The answer is simple – If you are investing in something, a cash or special-purpose loan is the right choice.
The replacement of old doors/windows, better insulation, fixing your roof or paying for your children’s education most certainly are investments worth making.
It is normal to not always have enough funds to cover everything. And, at the same time, it is natural to ask for help when you are unable to do something on your own.
What do you need to consider before applying for a loan?
As we’ve already explained, a loan can be approved quickly and can be an excellent solution, but only if you have assessed that the loan is the best option for your specific situation.
Given that we, as a bank, are oriented toward providing a complete range of high-quality services, we feel that it is our duty to provide you with advice in relation to the assessments you should make before coming to a final decision to apply for a loan. For this reason, we recommend that before you apply for a loan, you should to the following:
Assess your ability to repay the loan
Bear in mind that submitting a loan application means adding to your monthly expenses for the entire duration of the loan – have you considered your monthly budget and the fact that you will be required to regularly service your loan?
You can use our calculator to assess the cost of the loan and the amount of your monthly instalment. Enter the amount of money you would like to borrow and the maturity period and you will receive a framework estimate of your monthly instalment. The monthly instalment should be one of the primary factors to take into consideration when making the decision to take out a loan, as the instalment is something you need to fit into your monthly budget. Take your current earnings and expenses into account, as well as any financial obligations you may have in future. Any time you are late making your payments, you may be penalised with additional fees, and this effects your credit rating or credit history – that is, your chances of taking out another loan at some future date.
For this reason, if you are unsure of your ability to cover the monthly cost of the loan, the instalment that is, it is perhaps better for you to reconsider your decision.
Think about whether the investment you plan to make is necessary
This advice stems from our first recommendation – i.e., assessing your ability to repay the loan. If you are thinking about a special-purpose loan, we are certain that the investment for which you require the funds is a necessity, but given your ability to repay the loan and other expenses which may be tied to the loan or any potential penalties you may have to pay for defaulting on your loan, look at the pros and cons and decide whether this really is the right time for a new investment.
Document preparation
Once you’ve decided for certain that a cash or special-purpose loan is the best option, you will need to prepare the necessary documentation: evidence of salary/earnings (salary slips for the past 6 months) and a read personal ID card, so that you can submit these immediately when applying for the loan.
3 steps to receiving a investment loan
From the moment you decide to apply for a investment loan, until final repayment, there are a few steps that you need to take, which can all be done in a single day, without having to vising any of our branches/service points.
Here are the steps you need to take:
- Calculation of the instalments and loan amount. Our website enables you to receive an assessment of how much your instalments may be, relative to the amount you wish to borrow and the repayment period.
- Personal data entry, including your monthly salary.
- Confirmation of earnings/employment and a form of personal identification. You are required to provide salary slips for the past 6-month period, as well as a read personal ID card or copy of a personal identification document. If you are unable to submit these documents straight away, you can do this subsequently, that is, just before loan disbursement.
You can take out a online loan up to RSD 600,000, without having to visit the bank, and for loans exceeding RSD 600,000, you can submit an application online, but you will need to make one trip to the bank to sign documents prior to disbursement.
It is up to us to make sure the loan application and approval processes are as quick and efficient as possible, and our Online Centre Advisers will contact you soon after you have filled in the online application form and are there to help you complete the process.
