The crisis has changed the terms of debt issuance, but an acceptable alternative is still possible
The economic turmoil has deteriorated the financial condition of both the common people and large companies. Between exchange rate fluctuations, declines, and the decrease in profits of most banks, the situation of both issuing and receiving loans is clearly not the best.
The crisis is prompting banks to choose borrowers more carefully, as massive unemployment and the promise of bankruptcy are unable to pay money to a multitude of customers. Only in the first half of quarantine, the number of overdue loans increased to 26%, and after the outbreak of the epidemic the first payment on loans generally fell to 50–60%.
Most banks in quarantine offer borrowers a flexible loan payment schedule, which includes the following options:
- Debt holidays on the body of the loan with the protection of interest payments.
- Full credit holidays represent actual deferrals of payments.
- Restructuring monthly payments in more economical amounts.
Despite the complexity of the situation, the demand for loans is increasing every day, especially for consumer loans. But changes from banks are more noticeable – additional checks from the recipient make it more difficult to obtain a loan, reduce the size of existing credit limits in many financial institutions, and make non-cash purchases from credit funds Quantity is limited.
Now, lenders study the property and income of the borrower, analyzing the behavioral characteristics of the individual as well as his or her socio-demographic characteristics. Much more actively began to use data analysis of information from credit history bureaus and even social networks.
Some banks generally refused to lend to new customers, resorting to this practice, for example, at FUIB. Furthermore, due to quarantine, 20–30% of bank branches closed, and which did not significantly reduce their working hours – hence, online lending is becoming one of the most convenient and profitable sectors.
If we talk about banks, it is possible to apply for loans online only by now – you must either choose the card in person or order a courier delivery. At PrivatBank Online, you can order a free gold card with a loan of up to 75 thousand UAH and a grace period of about two months, during which you are not required to pay interest. At the rate of 0%, we are only talking about a monthly commission of 3.5% of the loan amount.
Monobank offers a card with a credit limit of up to 100 thousand without going to the bank. The recipient must send a passport and tin photo. The interest rate on such loans is 0.00001% per annum, monthly commission up to 4% of the loan amount, but personal settlement is possible.
At Alpha Bank you can apply for an online loan with a minimum tenure of 12 months and a maximum of 48 months for $ 5000. The actual annual interest rate and estimated total cost of the loan depends on the size and duration of the loan and can range from 34.5% to 115%.
Raiffeisen Bank Aval offers a loan with an interest rate of 39.96% per annum, but with an upfront balance of 0%, once and without monthly commissions. The maximum amount of such a loan is 100 thousand UAH. Meanwhile, Idea Bank offers a home loan with a limit of up to 150 thousand with a commission of up to 2.5% of the amount of each transfer.
If we are talking about small amounts, then it makes sense to consider loans from microfinance companies. In addition, they are a bit easier to obtain – a clear credit history and even a “banking” age is not necessary (usually banks give loans to customers between 21 and 65 years of age), this is just an adult. Enough to happen. Nevertheless, MFIs reject the average of every other application during quarantine.
In Money4you you can borrow up to 7 thousand UAH per month at a rate of about 0.1% per month. Credit7 has the same interest rate, but the limit is higher – up to 10 thousand UAH. The “Hot Credit” loan from E-Groshi is available at 0% for 30 days, and under the “Business Premium” program, the limit increases to 30 thousand UAH at 1.38% for 60 days.
Read: Credit holidays for individuals: Ukrainian banks offering.