How to choose a moneylender safely and securely!

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A moneylender who lends money is also called a moneylender . Consumer finance, banks, credit companies, etc. are applicable, but not all moneylenders are excellent companies. Among them, there are also companies that should be avoided, such as dark money.

In this article, we will thoroughly explain what kind of business is called a money lender, its mechanism and rules, and how to distinguish unscrupulous business operators. We also introduce consumer finance recommended by the money association, so it is a must-see for those who want to borrow money wisely.

There are three typical moneylenders: banks, consumer finance, and consumer credit companies

A moneylender is a term that refers to a person or group that makes a living in the money lending business. Currently, not only consumer finance and credit card companies (former consumer credit companies), but also megabanks, regional banks, internet/distribution banks, and life insurance companies are providing loans, but moneylending is basically for individuals. It refers to a business that provides financing to

Here, we will look at money lenders that mainly lend to individuals as “money lenders”. In modern Japan, there are three main businesses that lend money to individuals: banks, consumer finance, and credit card companies.

In addition, life insurance companies and non-life insurance companies also provide loans to individuals, but they are excluded here because they are not lending as a main business and have a strong implication as ancillary services of insurance.

Bank personal loans feature low interest rates

Not only megabanks, but also regional banks, shinkin banks, credit unions, and other banks are utilizing the abundant funds obtained from the deposit business and financial markets to provide large-scale loans to companies and other business operators. I came.

We also offer a variety of personal loan products. Loan products are available for different purposes, such as housing loans in units of several tens of millions of yen, automobile loans in units of million yen at low interest rates, renovation loans, bridal loans, and education loans. These are financed by means of a deed for which no loan card is issued.

In recent years, we have also been focusing on the small-lot card loan business targeting individuals. Card loans offered by banks are characterized by lower interest rates compared to products offered by consumer finance .

The current bank deposit interest rate is 0.1%, which is almost no interest even for time deposits. Since we lend money based on such low interest rates, it is generally possible to lend at low interest rates compared to other personal lenders (such as consumer finance).

Products for individuals offered by banks are characterized by products that offer low interest rates in units of 1 million yen, such as housing loans and car loans, but in recent years, bank card loans and free loans that can be borrowed from tens of thousands of yen have also become main products . growing into one.

The first is that there are many people who use it with an easy feeling. There are people who use it many times, probably because they feel secure that they are borrowing from a bank.

Second, banks tend to take longer to process personal loans than consumer loans, so even if you think you need money right away, you may not be able to get it right away.

Consumer finance loans can be financed on the same day at the shortest

Compared to banks, consumer finance mainly focuses on small loans, and most of them offer loans of several million yen at the most. Among them , card loans from major consumer finance companies have become synonymous with consumer finance.

Card loans provided by major consumer finance companies such as Aiful, Acom, and Promise are characterized by speedy financing that is not possible with bank card loans, such as same-day loans in the shortest time and screening results in as little as 30 minutes. In addition, unlike housing loans, etc., it is gaining popularity because it can be borrowed without collateral and without a guarantor.

In addition, major consumer finance companies are also focusing on improving convenience, installing unmanned contract machines exclusively for card loans throughout Japan, and recently distributing smartphone applications, etc. It is now available for borrowing.

However, in small and medium-sized consumer finance, which is also called “town money”, loans on deeds are mainly conducted based on contracts, and there are many cases where unmanned contract machines and ATMs are not available.

In the past, consumer finance companies operated at interest rates that exceeded the Interest Rate Restriction Law, but since the Money Lending Business Law was revised in 2006, they have begun to provide loans within the Interest Rate Restriction Law. However, the maximum interest rate is about 18% per annum, which is slightly higher than banks.

Consumer finance card loans are characterized by speedy screening and financing, as well as services such as interest-free periods. In recent years, the diversification of loan products has progressed, such as the provision of consolidation loans and business loans, mainly from major consumer finance companies.

Characteristics of loans provided by credit companies

Many credit card companies were originally consumer credit companies, but then credit card issuing companies that became popular in the United States entered the industry, and now credit card companies are also issuing credit cards . It’s like a card company.

In recent years, many credit card companies, which used to operate as credit companies, also offer unsecured and unguaranteed personal card loans. Depending on the company, it may be called a cashing card.

However, many credit card companies seem to have a strong tendency to focus on loans using the cash advance function of their own credit cards and business cards for self-employed people rather than card loans for individuals.

One of the reasons why credit card companies’ individual card loans have not become their main products is that the balance between high interest rates and screening speed is not well balanced.

Credit card companies offer card loans for individuals (cash advance cards) at the same interest rates as consumer loans, but they cannot be reviewed in a short period of time after application, and cards are issued by mail. It will take some time for the card to arrive.

For this reason, users who are more concerned about loan speed than interest rates often choose consumer finance, and conversely, those who are more concerned about interest rates than loan speed often choose banks. Therefore, it can be said that card companies’ card loans are not popular.

What is a credit card cash limit?

As a way to borrow cash from a credit card company, there is a credit card cashing limit other than a personal loan. Like card loans from major consumer finance companies, the appeal is that you can withdraw money anytime, anywhere from affiliated ATMs such as convenience stores.

Another advantage of credit card cash advances is that you can receive a loan immediately without having to undergo a new review. However, since it is not possible to use interest-free services such as major consumer finance companies or transfer loans that are available 24 hours a day, 365 days a year, it is inferior to other card loans in terms of usability.

How are credit card interest rates determined?

The interest rate set for the card loan is determined according to the repayment capacity of the borrower from within the range of the minimum and maximum interest rates set by each company.

Even if you borrow money from the same money lender, such as consumer finance or a bank, the interest rate applied will differ depending on the borrower. The interest rate depends on the repayment capacity of the borrower, and the repayment capacity is determined by various factors.

Among them, credit information such as the work status and income of the loan applicant, the repayment status of loans from other companies, and the amount of borrowing are emphasized. Basically, the interest rate is determined from the perspective of whether you can repay the loaned money.

As determinants of interest rates, social attributes such as trustworthiness of the employer, income stability, and length of service, as well as the amount borrowed from other companies and the smoothness of repayment (credit information), are taken into account in a comprehensive manner. be examined and judged.

Also, the higher the loan amount, the lower the interest rate. A larger  shark loan amount indicates a higher repayment capacity, and is determined based on the same criteria as interest rates.

In other words, those who are judged to have a high repayment ability are given lower interest rates. However, those who are judged to have a low repayment capacity are likely to be unable to repay the loan, so they will try to recover the loan quickly by raising the interest rate.

The interest that will be paid based on the interest rate determined by the criteria above is calculated as follows: Borrowing amount x interest rate ÷ 365 days x borrowing days. The higher the interest rate, the more interest you pay, and the less money you have to pay back the principal.

In fact, let’s compare the breakdown of each person who borrowed 500,000 yen at an interest rate of 10% and 18% a year, borrowed for 30 days, and repaid 50,000 yen on the repayment date. prize.