1. What are the advantages of microfinance companies?
1, the application threshold is low. They are much more approachable than picky banks. Some borrowers with low income or salary in the form of cash payment (which can provide self-help for 3-6 months) can apply for loans directly through small loan companies. 2. The lending speed is fast. The bank's audit process is strict and cumbersome, while the lending institution is just the opposite. Their high efficiency undoubtedly increased the loan speed. So friends who are in urgent need of money can consider applying for loans from such institutions. 3. Lending information will not be included in the credit information system. Although the credit information system is in an increasingly mature stage, it still needs to be improved. The reason is that any credit transactions between borrowers and lending institutions other than banks will not be recorded in the credit information system, nor will they be reflected in the credit information report. This means that the borrower's debt and overdue behavior not only enjoy full "privacy", but also help the borrower to borrow from other institutions again.
Second, what are the shortcomings of microfinance companies?
1, the loan cost is high. Due to the low application threshold, small loan companies naturally bear relatively large loan risks. In the loan industry where risks are exchanged for profits, the interest charged will naturally be higher than that of banks. However, it is worth noting that the charging standards of small loans and companies will be different, and borrowers can still choose freely in Wang Daozhong. 2. There are many loan scams. In the mixed market of unsecured loans, many criminals pretend to be small loan companies to defraud borrowers who are in urgent need of money. Generally speaking, 80% of lending institutions require borrowers to repay in advance by collecting deposits, handling fees and interest. However, in fact, regular small loan companies will start to charge related fees in the first month after the loan is successful. Banks that value collateral and check the credit reporting threshold are not only concerned about the borrower's repayment ability, but also about whether his personal credit is good.
In the cash society where unsecured loans are becoming more and more popular, many people will seek financial assistance from microfinance companies when there is no way to borrow from banks. However, it is necessary to remind everyone that you must choose a formal lending institution to avoid unnecessary trouble for yourself.