The loans that have been changed are a particular type of personal loan and are based on the stipulation of bills that the debtor undertakes to pay at the fixed term. Usually the payment of the bills of exchange changed monthly, but the customer and the credit company can, by mutual agreement, establish a different frequency for the payment of bills.
Although currently the major bank lending institutions and many lending companies have decided to remove loans changed from their product package, in the last few years special lending companies have developed and developed on this type of personal financing. They provide the client with the required financing, at the same time issuing the bills necessary to repay the loan completely.
Money collateral loans
In addition to traditional loans being changed, there is another type of loan: personal loans to guarantee exchange. This type is widely used to regulate lending between individuals, always respecting obviously the maximum limits of interest imposed by the prohibition of usury.
In order for a converted loan to be properly stipulated, the customer must provide the creditor with a valid guarantee . This varies according to the loan applicant and is the employee severance indemnity fund, a guarantor for newly hired employees and a life insurance policy (initiated by a minimum of two years) for freelancers.
In reality these guarantees are not mandatory, at least in terms of the law, but are requested by the creditor to have greater security, in addition to the bill of exchange.
Loans changed, if we exclude bills, are practically indistinguishable from other types of personal loans.
The applicant can personalize the loan, choosing the amount to be requested (up to the maximum established by the creditor, based on the repayment capacity of the debtor), the duration of the loan (usually from a minimum of 12 to a maximum of 120 months) and possibly the possibility of extinguishing the entire loan in advance. As previously described, the creditor may request further guarantees, in addition to that offered by the issue of the same promissory note.
The changed loan offers considerable advantages compared to traditional personal financing :
1. A loan that has been changed, to be granted, does not necessarily require an inspection of the applicant in the database. The only exception is the collateral loan financing.
2. Bad payers can apply for and obtain a changed loan. Usually the loan is not granted to protestants, but it is possible that the sum requested will be paid to them, according to the choice of the single credit institution.
3. You can apply for a loan that has been changed even if you do not have a paycheck because the issue of bills of exchange is a sufficient guarantee for the creditor.
4. It is a more flexible loan, capable of meeting any debtor’s difficulties: the client may request to reduce the amount of the installments even on loans already made, increasing the overall duration of the loan (and consequently increasing the rate of interest).
How the bill works
The issue of bills of exchange, which allow you to take advantage of the advantages described, is also the negative aspect of the loan changed, due to the nature of the bills. The bills are executive securities , therefore the creditor has the right, at the expiration date, to obtain the payment, without having to provide, in case of delay of the debtor, further evidence of the legitimacy of the transaction.
With the loan changed, it is easier for the credit company to get the payment, possibly by distraint and selling the debtor’s assets that delay the payment of the installment. The credit recovery of traditional personal financing is instead a much slower procedure.
The loan is a good solution for those who need financing , but can not take advantage of other types of loans. It must be remembered that this type of personal financing is not the best in terms of interest to be paid, so it is advisable to compare, if possible, the loan with other personal loans options.