Loans for large and small amounts are becoming more and more popular. The good news is you can get a new loan by borrowing money online and transfer right away (vay tiền online chuyển khoản ngay). One of the reasons for this is the aggressive marketing campaigns of many financial institutions. Unfortunately, in many ads, they very rarely focus on the possible risks that come with obtaining a loan – small of big.
Getting a loan – risks
What are the risks associated with obtaining a loan? First of all, these are the risks of non-payment. There may be, in fact, a lot of reasons, but they are all combined into one – not making payments on time. At the same time, when signing a loan agreement, the borrower does not realize the possibilities that will hinder repayment. Some risks can be:
- Loss of work and impossibility of new employment in the shortest possible time. There can be many reasons for this, from the banal closure of an enterprise to its bankruptcy. Moreover, in the latter case, a person can be fired without severance pay, which will not give them the opportunity to make payments for the few months that will be spent looking for a new job;
- Deteriorating health. Such a situation is also quite likely, and a person may not have chronic illness, but deterioration in health can come abruptly. This was especially clearly shown by the situation with the recent pandemic. In addition to the loss of income, a person’s costs for treatment, drugs, and rehabilitation are significantly increased. There may be no more money left to pay off the loan;
- Critical housing situation – fire, flood, other natural disaster. It is possible that the losses will be compensated by the state, but this will take time, at least several months. And you need to pay the loan on a monthly basis;
- The most difficult case is the death of the borrower. In this case, their debts will be passed along with the inheritance to their relatives. But, they may not be able to pay the loans.
What is Loan Insurance?
The ideal way out of this situation is to take out an insurance policy for your loan. And then, in case of unforeseen events covered by the policy, the need to repay the loan falls on the shoulders of the insurance company. On the part of the payer, there will only be an obligation to confirm that the insured event really occurred, with official documents. Of course, such an agreement comes into force only after the payment of the insurance premium. But this is already a guarantee that, in a difficult situation, the payer will not be left alone with their loan. If they don’t have the ability to repay the loan for legitimate reasons, the insurance company will take on this responsibility. This option is beneficial to everyone. For a financial organization, the availability of insurance reduces the risks of non-payment, respectively, it makes it possible to reduce interest rates for regular customers or those who are ready to purchase an insurance policy.
Where can you take out an insurance contract?
Please note that insurance companies do not issue loans themselves. Also,financial organizations do not deal with insurance policies. However, banks can sometimes act as intermediaries and recommend certain insurance companies for their loans. However, each client has the right to choose their own insurance partner. It will be enough to contact the insurance company in advance and clarify all the details for purchasing such an insurance policy. The premium will depend, first of all, on the amount of the loan. Most often it is calculated as a percentage of it. In addition, they may take into account the financial condition of the borrower and some other factors.
Why is it worth taking out insurance?
Life shows that no one is immune from unforeseen situations. And the company that seemed as reliable as possible yesterday can be declared bankrupt today. And natural disasters around the world have become more frequent. Therefore, it would be most reasonable to take care in advance to protect yourself from the case of non-payment of the loan. In the event that you are late for the next payment:
- The financial institution will begin to charge additional fees and penalties that increase the amount of the debt;
- Information about non-payment will go to the credit bureaus and will worsen the borrower’s credit rating making it more difficult to get the next loan to repay the overdue one;
- There may be other problems related to the creditor’s claims to pay the debt.
This situation can bring enough trouble to try to anticipate and avoid it.
Insurance company – safe and profitable
The insurance company will offer to provide for the most probable reasons for non-payment and insure the risk of their occurrence. For example, now a serious illness will not become a problem if such a probability was indicated in the insurance policy. Upon the onset of a disease and proof, the insurance company will immediately close the loan – either in full or minus a small percentage stipulated in the contract. Thus, the risks of trouble from non-payment of on-time payments are reduced to a minimum. Of course, it is worth noting that the company examines the occurrence of each insured event very closely and carefully. If any of the conditions do not comply with the agreement, payment may be refused. Therefore, before finalizing an agreement, you should carefully study it. It is very important to spend extra time, but negotiate with the agent on all insured events that, in your opinion, may arise and negatively affect your financial situation.
Choosing an insurance company
Sure, you have already chosen a reliable financial institution to get your loan, such as Oncredit.vn. But the partner must be as reliable. Of course, not all insurance companies are equally reliable. Before signing an insurance contract, you should study the reviews of the company’s customers. First of all, you should pay attention not to how well they serve customers when concluding a contract, but to how quickly and efficiently they solve the insured events that have arisen, whether they pay the due amounts in full.
Together with insurance company for safety
Lending is a rather risky business. That is why financial organizations have established mutually beneficial cooperation with insurance companies with loan insurance. This is beneficial for financial companies because it reduces the risk of non-payment of loans and optimizes the scale of interest rates. This is beneficial for insurance companies because their turnover is significantly increasing, new customers are constantly arriving, and there is an opportunity to significantly increase the client base. Finally, it is beneficial for the borrowers themselves because in the event of force majeure circumstances, the insurance company will take care of the timely payment of the debt. This interaction allows you to significantly raise the level of service in financial companies, and provide customers with profitable, quick loans. Financial risk insurance will make you feel at ease in any difficult situation. When signing a lending agreement, take care of drawing up an insurance policy.