What are the features of this type of lending and what nuances do you need to know when applying for a loan on bail?
If you need to arrange a loan, and there is not enough standard package of documents, the lender requests additional collateral from the applicant. They in practice often becomes a pledge of valuable property. What kind of property can be mortgaged to get a loan on security and how can the loan documents on a car or real estate help a potential borrower?
If a client’s salary is not enough to cover the upcoming loan payments, it makes sense for him to put some liquid assets in the bank, for example, his personal car.
Nothing wrong with that. After all, the machine itself will remain at the same time at the disposal of the borrower. Bankers, he will be forced to transfer only documents for cars, but rather only one document – a vehicle passport, which the bank will return immediately after the loan is closed.
Advantages of car loan
- Receiving a large amount of borrowed funds for any purpose – usually within 1 million rubles, but not more than 50-70% of the estimated value of the car.
- Registration of a loan agreement at a preferential rate that differs markedly from the one that provides for consumer loan conditions without collateral in the same bank.
- Optional requirement to provide a full package of documents. Often, such loans are issued on the basis of only three papers, excluding a certificate of salary and other documents from the employer.
- An optional requirement to purchase a CASCO policy. But with one remark: the refusal of insurance risks provoking an increase in the base rate by 2-3 percentage points.
What car can I lay?
If we talk about the requirements in respect of the collateral, they are almost identical in all banks. As security for consumer loans, today only foreign cars with a lifetime of no more than 5 years are accepted everywhere, and domestic cars no older than 3 years old.
Who will approve such a loan?
Any citizen of the Russian Federation who has already celebrated its 20th anniversary, but has not yet reached working age, can apply to the bank for a consumer loan on the security of a car. As for retired car enthusiasts, as well as students who have recently hired, they have, frankly, not many chances to receive such a loan. And only a viable guarantor can save them.
The credit on the security of the car since 20 years.
Speaking of work. Let the bank and not ask for a whole pile of documents from the employer, but the lenders will force the borrowers to confirm the employment experience. And this figure should be calculated at least three months of service at the last place of work and six months of total seniority.
And the applicant will have to boast of a permanent residence permit in the loan processing region, because citizens with temporary registration will not be given collateral loans under any sauce.
What about the package of documents?
As we have already noted, a consumer loan secured by a car can easily be obtained with just two or three documents on hand. As usual, the case is limited to a Russian passport, the second identity document (usually a driver’s license) and pledged to the TCP bank.
However, sometimes this list may be expanded, including at the expense of the following papers:
- an extract from the workbook or its certified photocopy;
- Help 2-NDFL or similar document, made on the sample provided by the bank;
- a number of supporting documents confirming the borrower’s solvency.
A loan secured by real estate
In the event that the cost of the car belonging to the borrower cannot cover the stated loan amount, the bank will offer it to mortgage the property. And as the property is more liquid, any apartment or country house will not only significantly raise the bar with financing, but will also improve the reputation of the borrower in the eyes of even the most disloyal bankers.
What is good consumer loan secured by real estate?
- Uniquely low interest rate. Among all non-earmarked programs, loans secured by documents for an apartment are the cheapest. For example, in Sberbank of Russia, the base interest on such a loan starts at 15.5% per annum.
- The maximum available amount for consumer lending. Up to 5 million rubles, and in some banks and up to 10 million, property owners can apply for this amount of borrowed funds, subject to the mortgage.
- Very long crediting period. Of course, it will be practically unrealistic to return the requested money in 3 years and even in 5 years. But 10 or even 20 years is a suitable term. At least, the separation of payments for such a period will help the borrower to significantly reduce the level of credit burden on the monthly budget.
What real estate can be pledged?
Extremely liquid and owned by the borrower or co-ownership. In the latter case, all the current owners will have to confirm their consent to the implementation of the credit transaction. If this does not happen, bankers will not accept such a pledge. Similarly, they will do in respect of the property, one of the co-owners of which will be a minor citizen of the Russian Federation or an incapacitated person.
A loan secured by real estate in Moscow and Moscow Region, from 20 to 65 years.
If we talk about specific properties, then as a pledge today without problems will be able to make an apartment without unauthorized redevelopment, a residential house (with or without land), a garage (again, with or without land) and a separate land plot.
Who has the chances of a consumer loan secured by an apartment?
Traditionally, the number of potential borrowers includes citizens of solvent age with a Russian passport, a necessary residence permit and evidence of permanent income. In general, nothing new. Unless the minimum length of service during registration of such a loan rises to 12 months of general work experience and 6 months of service at the last place of employment.
From the original requirements – the need to attract a co-borrower, combining income with which will allow the main applicant to fulfill debt obligations without damaging the personal budget. His role on himself will be able to try on the spouse (a), whose sphere of work will not intersect with private enterprise. The borrower and the co-borrower will be equally responsible for paying the consumer loan secured by real estate.
What documents will be needed for registration?
Loans issued on the security of liquid housing, in terms of volume and duration, are virtually indistinguishable from classical mortgage loans. But is their receipt really accompanied by similar problems with the documentary basis?
By no means. Borrowers who intend to arrange a bank loan secured by real estate documents actually require the most common. From personal it is a standard set of 4 components: a passport, an additional identity card (TIN, insurance policy, driver’s license, etc.), as well as a salary certificate and a copy of the work record. With the co-borrower, by the way, they will ask no more.
As for the mandatory documents on real estate, their number will be limited to the following papers:
- report on the estimated value of the property;
- his cadastral passport;
- certificate of registration of ownership;
- references for forms 7 and 9;
- extract from EGRP.
But it is good if the borrower is single, and the subject of the pledge is entirely his own. And what if he is married and property rights are owned by several other owners? In this case, to determine the property rights of each of the interested parties, as well as to express their consent to a loan secured by an apartment, the documents from the main list will have to be diluted with additional ones, including a couple of notarized statements and certificates.
Loan without collateral as an alternative
To risk property is not the best option for borrowers who doubt their solvency. It’s still dangerous to play with fate, being unsure of your victory. So why then get involved in this game?
Well, if a person needs money, let him take a loan without any security. With a passport and a second document on hand today, for example, you can safely take up to 200 thousand rubles, moreover, directly on the day of application. And if you supplement them with a certificate 2-NDFL and an extract from the workbook, then half a million will be able to declare.
Even higher credit level will raise the fact of attracting a guarantor. A solvent assistant, who agreed to shoulder some financial risks, will be able to incline the bank to a million rubles loan. And this, for a minute, is an amount to which the borrower will be able to qualify as part of mortgage lending only when transferring documents for a property worth from 2 million rubles. So, maybe you don’t always have to take risks?
Maybe. Although, on the other hand, a solid consumer loan without collateral will always imply a much more serious burden on the budget than a loan of the same size with a security. After all, firstly, it costs a little more, and secondly, payments for it are stretched not for 10-15 years, as in the case of a loan secured by documents for a car or apartment, but a maximum of 5.
In general, the choice for borrowers is not easy. Actually, for this reason, before going to the bank and filling out an application for any of the loan products, it is important to always think things through to the smallest detail. It is necessary to determine current needs, set a clear financial task for ourselves and evaluate our capabilities as accurately as possible. And it would be nice to recall such a thing as credit risks, which would give a reason to work out a plan of emergency actions in advance in case of their likely occurrence.
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