1, the application threshold is low. Compared with banks, microfinance companies known as "civilian banks" are quite approachable. 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 procedures are simple and the lending speed is fast. The procedures of bank approval and audit are complicated, and there are many preparation materials, so it is not easy to borrow money, while microfinance institutions are efficient, which undoubtedly simplifies the procedures and improves the speed of lending.
3. Lending information will not be included in the credit information system. Although the credit system is becoming more and more mature, it still needs to be improved. The reason is that all credit transactions between borrowers and lending institutions other than banks will not be recorded in the credit information system, and naturally they will not 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.
4, flexible use, generally not a problem.
5. Compared with private lending, the security of small loan companies is greatly improved. Formal small loan companies handle loans through formal procedures, and small loan companies are much more standardized than private lending. Applicants apply for loans in small loan companies, and the funds are greatly guaranteed.
Disadvantages:
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 turned into profits, the interest charged will naturally be higher than that of banks. To apply for a loan in a small loan company, in addition to paying the relevant interest fees, you also need to pay other fees such as handling fees to the small loan company. Companies charge a variety of fees, which are difficult for lenders to identify. Friends who need loans can consult free consulting institutions such as Rongencyclopedia.
2. There are many loan scams. In the mixed unsecured loan market, many criminals wearing the "coat" of small loan companies cheat borrowers who are in a hurry to use money. Generally speaking, 80% of lending institutions will require borrowers to repay in advance in the name of collecting deposits, handling fees and interest. But in fact, regular small loan companies will start charging related fees in the first month after the loan is successful. Lenders must keep their eyes open.