Every day, life throws people questions that require an immediate response, sets tasks that need to be solved with the help of various amounts of material resources. The habitual life of each person has long been associated with the concept of providing loans to individuals.
In this article, we consider the legal framework for lending to individuals.
What is regulated by law?
Current legislation regulates the types of lending and the principles of servicing individuals very precisely. By-laws and laws are constantly issued. Personal issues that determine the amount of payment for the services of a credit institution for crediting interest and repayment periods are established by the creditor only within the framework of the legal field. There is a law on lending to individuals (Federal Law No. 353).
Consumer lending basics
Thanks to the system of lending to individuals, a person got the opportunity to get rid of very complex numerous problems, the solution of which on their own is often not possible. These include the following:
- The costs of leisure, travel, treatment.
- The purchase of housing or any other real estate, repair, reconstruction, construction.
- The need to purchase various pieces of furniture and things.
- Payment of internships or studies in foreign and domestic educational institutions of various categories.
What does the law on lending to individuals mean?
Legal basis of lending
The current legislative field regulates that any person who has the citizenship of the Russian Federation, has reached the age of majority and receives a legal salary, can fully count on obtaining credit funds. It should be noted that non-banking and banking credit organizations are able to offer a very large range of services from the provision of loans, mortgages, microloans and loans. Between the parties, relations in the field of lending are regulated by paragraphs of the Civil Code of Russia 1.2 Ch. No. 42. This is the legal basis for lending to individuals.
For the client, you can always find the optimal scheme that suits him. It should be noted that a large number of banking institutions can accept the application of a private person who has a gray salary for a loan. This technology was called a loan without providing documents confirming the income received, or express loans. One of the most popular banking services is the provision of loans to individuals. A significant part of the functioning of small commercial and reputable organizations consists of conducting this type of operation. Nowadays, lending to individuals is becoming more active, despite a sufficient degree of risk, which is associated with such positive factors of banks, such as:
- Successful management allows all parties to the lending process to become economically successful, whether it be a borrower, an organization, or the whole society.
- For investing in a modern economy, attracted and own resources are concentrated.
- By generating income, the stability and reliability of banks is enhanced.
Types of loans and borrowings
Loans to individuals depend on the type of loan.
A person with a certain income level has the right to receive a particular loan amount on the basis of legal lending rules for individuals. This service can be offered by small and large state savings banks, banking commercial institutions. The conclusion of such an economic transaction is based on a legal document, a loan agreement, which is a bilateral agreement between the lender and the borrower. The implementation of lending to individuals can be of two directions:
- For the capital construction of a country house, apartment building, garage, garden house, expansion of existing housing or large-scale repair work.
- For urgent needs, such as treatment, study, buying a car, creating a household, purchasing real estate, gardening or summer cottage plots, household items and equipment.
The Law on lending to individuals prescribes the following.
How else are loans divided?
Based on paragraph 14 of Art. 7 of the Civil Code of the Russian Federation consumer loans are classified into various complexes according to a number of characteristics and the forms below. Inappropriate direction for raising funds - overdraft, urgent needs. Target - mortgage, study, securities. Upon provision, on the basis of collateral, they are divided into a revolving line (revolving lending) and a one-time loan. By the length of the term, lending is divided into long-term (for 5 or more years), medium-term (from 1 to 3-5 years) and short-term (up to 1 year). Due to the certain instability of the economic situation, long-term loans are determined for a period of more than 12 months, and short-term loans for one year. These are the main types of lending to individuals.
Credit Charts
A loan with and without a payment by installments schedule is formed by the method of repaying borrowed funds. In case of a loan without an installment plan, interest payments and the principal amount are paid off at one time, and in the case of installments, the amount is divided into uneven and uniform shares specified in the Agreement. The theoretical foundations and legal definition of the contract as a legal document are given in Art. 819 of the Civil Code of the Russian Federation. The Law on lending to individuals also regulates other aspects.
Types of loan security, its repayment
In order to reduce the risks associated with the repayment of credit funds, and in case of discrepancy between the data on the income received and the declared loan amount, additional resources are attracted for their repayment. As collateral, property owned by the borrower is involved. Also, pledged tangible assets must have sufficient value, minimal depreciation and high liquidity. Today, there are several types of collateral that provide credit and are confirmed by a specific set of documents of the current legislation:
Tools, fixtures and equipment are used as collateral, accompanied by documents of ownership, confirmation of payment for the purchase of this equipment and acts of commissioning and commissioning. This is the process of lending to individuals.
- The property. Statement of consent of all owners who have the right to this property, to pledge, confirmation of ownership of the borrower.
- Gooods at the work provided by individuals who conduct business. The package of documents includes the availability of goods and materials, their real value, and you also need to provide the originals of warehouse receipts, invoices, balance sheets and an invoice.
- Vehicle. You must provide a technical passport for the car and insurance policy.
Problems of modern lending in Russia
The structure of lending services in Russia today exactly corresponds to the legislation, which leads to a reduction in issues and problems. One of the ways to ensure state stability in the economic field, on which the growth of our country's income level depends, is lending to individuals. Sberbank of Russia is the largest bank in the country; it occupies a leading position in the number of loans issued to the population.
The combination of financial and credit institutions operating in the capital borrowed capital market and activating and accumulating the use of income and having a layered structure plays an important role in the economy. But no matter how monolithic and harmonious the system of Russian banks is, problems regarding lending to individuals are still relevant.
Major imbalance
The reasons of a subjective and objective nature are caused today by the main imbalance in the credit sphere. Lending to people is affected by: an increase in the inflation rate, the influence of declining trends in the financial sector, factors of material and financial instability of a certain number of business entities and a decrease in solvency. These negative aspects can be called the consequences of financial downturns that reach crises of global proportions. They lead to a severe limitation of the possibilities for obtaining a loan on the one hand and entail that lending rates to individuals increase.
At one point, a process occurs when banks do not take risks, providing funds to people at hand. The reason for such a negative action is a possible non-return of the placed finances within the agreed period and in the amount agreed upon by the concluded agreement. This situation is characteristic of a decline in people's well-being. To ensure increased risks, a significant increase in the cost of credit resources is required, which represents a powerful lever of influence in the field of consumer and production processes.
What documents are needed for a loan to an individual?
The standard package of documents is the following:
- Passport of a citizen of the Russian Federation.
- A work book certified by the employer.
- Certificate 2-PIT or in the form of a bank.
- Application form.
Such requirements are put forward by Sberbank of Russia. It is also possible for those who receive a salary on a bank card to apply for a passport loan.
Problems of mortgage housing lending in Russia
In Russia, there are many problems in the field of housing loans, despite the development of various regional and national mortgage programs, the need for modern, high-quality housing, assistance and benefits to needy families. Three main systems of questions have been formed:
- Organizational issues - lack of interconnection, unbalanced market relations, lack of understanding among market participants, lack of necessary quality, useful and accessible information in this area and many other problems.
- Economic - the lack of the ability to use mortgage bonds in circulation, macroeconomic and financial and economic instability, insufficient banking resources for long-term lending for 20-25 years and the scale of costs for obtaining a mortgage up to 10-12% of the total cost.
- Deficiencies in the legal framework and legal issues. The work of the issue mechanism in relation to the collateral prices of documents is not confirmed by regulatory procedures, there are no effective grounds for confirming a pledge, limited economic turnover of land, with the slightest delay in payments on a loan people are evicted from mortgage housing.
Lending to individuals of various types, as well as mortgage lending for a large number of people in need, is unavailable regardless of the availability of diversity and the huge volume of unresolved issues.Such inaccessibility is a direct consequence of higher interest rates and tightened lending policies. This confirms 353 Federal Laws.
Where to get a loan without problems?
About applying to a banking institution in connection with the need to obtain a loan to solve various financial problems or for consumer needs, usually several problems may arise. These include the behavior, appearance and age of the borrower, the presence of a negative or problematic credit history, the level and availability of income. But if money is still needed, what should I do? Of course, no one will give loans to everyone in a row, without any legal or financial support. Huge risk lending often pays off with huge percentages of service, up to fifty percent.
The most simplified requirements for borrowers and, accordingly, the very procedure for obtaining a loan at VTB24, Alfa Bank and Russian Standard.
- In banks such as Orient Express, Tinkoff, Renaissance Credit, it is possible to get a loan even with a negative credit history. Loyal in such situations are also Russian Standard and Bin Bank.
- When filling out the minimum package of documents - the TIN code for the unemployed and for people without legal income and a passport, such loans as Renaissance Credit, Ural Bank for Reconstruction and Development, and Home Credit provide loans.
The Consumer Credit and Loan Act must be adhered to implicitly.
Conclusion
The opportunity to get the necessary money is great, but you should not count on the most profitable contract for the borrower without information and at the minimum interest rate. However, it is necessary to fulfill all loan obligations no matter how loyal the conditions are, because today the prospects of establishing oneself as a solvent borrower are expensive. This is indicated in 353 Federal Law.