Loan changed and draft: what is the relationship?
Let’s start by remembering that this type of payday loans are so called … because the payment of monthly installments is represented by the payment of a bill of exchange.
What is a bill of exchange
The bill is a credit instrument that allows the creditor (in this case, the bank) to obtain a quicker satisfaction of their claims in the hypothesis in which you can not pay the deadlines.
Thanks to the feature of enforceability of this credit title (guaranteed by the stamp imposed on it), the bank will be able to initiate the expropriation procedure of assets, avoiding a more complex process, if I could no longer pay the installments of a classic personal loan .
In short, the bank will conduct the title directly from the notary to make you protest , and refer back to your assets more quickly.
In turn, the bill may be issued in the form of a “treat” or “IOUs”.
In the first hypothesis, the bill is configured as an order that the bank addresses to the debtor, to pay a certain amount on an exact date to a third party (generally coinciding with the bank).
In the second hypothesis, on the other hand, the promissory note is a promise of payment that the debtor himself will formalize with this credit title: and this is the form of bill most used in loans changed .
The one below, is a classic draft to be completed:
Example of draft
In order to be able to use it as a payment instrument in a converted loan, you will have to fill it in its main parts :
- Place and date of issue
- Amount (Euro in figures and in letters)
- Expiration date
- Diciturà “I will pay” to identify the promise of payment (contrary to the route, where instead you will use the words “pay”)
- Domiciliation (ie, the place where the bill will be paid, generally coinciding with the bank counter)
- Data of the debtor
- Signature of the debtor
When issuing a loan that has been changed , you will presumably have to sign several bills (one for each payment installment, usually monthly), with various deadlines. You will then hand them over to the bank, which will then arrange for them to be repaid for payment.
Every time you pay the deadline punctually, you will be given the original bill and a receipt that will certify the payment, until the entire debt is extinguished.
If you have financial problems, to get a good alternative are the loans with home delivery .
What is the bill for?
From the lines that we have summarized above, you should already have understood why many banks prefer to reserve certain loans for some customers.
The bill serves the creditor to be able to satisfy his credit more quickly , going to assault the debtor’s assets with a procedure faster than what would happen with the ordinary process.
Who are the changed loans for?
Beyond their specific characteristics, you should bear in mind that the loans being changed are a form of financing like any other.
And that therefore they are mainly addressed to all those who need money, and are able to demonstrate that they will be able to return them in the agreed ways and times .
However, compared to other forms of “ordinary” personal loans , loans that have been changed can certainly boast some distinctive features that make it a preferential path for many people and, perhaps, for you too.
Loans with bills of exchange, as we have seen, in fact represent a ” privileged ” form for creditors, who can refer to the debtor’s assets more quickly and effectively .
It follows that, for the sake of clarity, we can outline two figures of potential applicants, among whom maybe you will be able to recognize yourself:
- Applicants with a situation of ordinary creditworthiness requirements : these are people who could probably also have access to other forms of loans, with an income from self-employment or self-employment, without excessive burdens determined by other loans in progress, without being protested or be included in the category of bad payers.
- Applicants with difficulty in respecting the ordinary creditworthiness requirements : they are people who do not have a working relationship or have an undocumented paycheck, have had particular problems in returning other loans.
Both categories of applicants may have a loan that has been changed . Of course I can not fail to point out the existence of loans with bills of exchange for freelancers .
However, if you belong to class a) , you should know that the loan can be represented only one of the many alternatives you can have (we’ll see shortly);
In hypothesis b) , on the other hand, the changed loan risks being an almost obligatory path, precisely because of the greater “security” that is given to the creditor bank in the satisfaction of the credit.
Attention, however: even if you fall into the hypothesis b), you must not place unlimited trust in the changed loans.
Loans with bills of exchange are still loans that are granted at the end of an investigation in which the bank will always try to understand how you intend to repay the capital.
Therefore, if you have an insufficient income, even with the presence of a changed loan, the financial institution could ask for the guarantee / endorsement of a third person (a parent, for example).
Moreover, as we shall see shortly, the request for a loan that has been changed, and the subsequent impossibility to pay bills, could lead to even more negative repercussions on your debt situation.
Advantages and disadvantages of changed loans
Fast changed loans are surrounded by false myths and false truths. And unfortunately, if you do a quick tour on the web, you will be in front of sites that do not contribute to give you the real information.
Let’s do a bit of clarity in a definitive way, summing up 3 advantages and 3 disadvantages of the changed loans.
Loans changed: that’s why YES!
Grant also to bad payers . With the disbursement of the changed loans, and the availability of bills as a “privileged” instrument to satisfy their credit, banks and financial institutions are also available to supply money to subjects who have been registered on the bad payers lists.
But beware, bad payers do not mean protested.
Elasticity in the return / renewal. Compared to what happens with other forms of personal loans, those that have been changed will guarantee greater flexibility in terms of renewal and return.
In the case of temporary difficulties, for example, a bill may be renewed or new ones may be issued. The only thing, always keep an eye on the costs that could be high.
Delivery even without a paycheck . The process of granting credit for a bill follows a path that is somewhat different from that of ordinary loans.
Therefore, even if the bank asks for some guarantee in the return of the capital (for example, the presence of a guarantor that can endorse bills), we can certainly say that these loans could allow you to have some more opportunities to borrow, even if you do not have a paycheck.
Loans changed: that’s why NO!
Beware of bills . They represent a good “weapon” in the hands of the banks but, at the same time, a dangerous loose cannon for those who sign them.
In fact, if you can not pay a bill, you run the risk of immediately going to the protest , which in turn starts a more serious and rapid procedure of debt recovery that is routinely activated with “normal” loans.
So, not paying a bill could be very expensive, and the registration in the register of protestors (which will practically blind any opportunity to get into debt again, until you have regularized the situation).
High costs . In many ways, the changed loans represent a sort of “last resort” for those who need money .
Therefore, if you ask for a loan that has been changed, you should take into consideration the risk of facing very high costs compared to other ordinary forms of loans.
The installment of the bill will in fact contain not only an interest rate often higher than normal (in the loans changed, the contractual strength of the banks is indeed greater), as well as costs and ancillary costs such as those related to the purchase of debt securities, to top-up of stamp duties or the commissions for preliminary investigation.
Therefore, before signing the contract, maximum attention to how much you will spend!
Ancillary guarantees . In this case, the bill is NOT the only guarantee that will be requested by the bank, but it is only the tool through which the bank is more protected.
Therefore, do not be surprised if together with the signing of bills of exchange, the bank will ask for additional guarantees such as the presence of a guarantor, the signing of life insurance policies, pawns, etc.
Items that may interest you : Small Loan Inpdap / Calculation Cession of the Fifth
Types of loans with bills of exchange
Even if the mechanism of the loans being changed is still the same (underwriting of the credit instruments and the contract, payment of the installments through the bills), it may be useful to know that the relationships underlying the changed loans may be different. We distinguish 5 distinct types, quite frequent.
Loans changed by private individuals . Modified loans are not an exclusive prerogative of banks and financial institutions: even a relative or a friend of yours can lend you a sum of money by issuing bills.
Of course, there may be several causes that lead you to prefer a loan that has been changed between private individuals and other forms of financing : we think, for example, of the opportunity to obtain more favorable conditions, or the impossibility of obtaining a loan with the ordinary banking channels.
In any case, and also in order not to prejudice personal relationships with those who are lending you money, always request and offer maximum transparency, with a written contract and with the help of an expert who can check the clauses here.
Loans with bill of exchange for self-employed persons . If you are self-employed, it is possible that you have already had the opportunity to experience with your own hands how difficult it is to access personal funding, compared to what happens with employees.
The explanation is quite simple: it is easier for a bank to assess the creditworthiness of an employee.
Which means that many self-employed people live in the constant difficulty of finding the sums of money needed to be able to fulfill their personal projects.
Fortunately, loans with bills of exchange for self-employed continue to represent a hard core in personal loans for self-employed workers: you can therefore evaluate them in the list of alternatives you have available.
Loans with bill of exchange without a paycheck . We talked about it a few lines ago. Modified loans are disbursed with less rigidity than other loans. Therefore, it is possible that banks and financial institutions can turn a blind eye if you do not have a workable relationship with a paycheck.
Of course, the fact that you are requesting a loan without a paycheck does not mean that the creditor can not ask for additional guarantees.
It is therefore very likely that you will be asked for guarantees from other persons (guarantors / guarantors), liens on assets, mortgages on real estate, and so on.
Loans with bad payers draft . For the logics that we have summarized above, the loans with bad payers are loans that you can have in order to get the amount of money you want, even if you have had some minor problems in repaying past loans.
As far as can be guessed, they must be small problems! Therefore, if you have already received a check or a draft from the protest, it is possible that you may have more difficulty obtaining a loan that has been changed.
For the rest, certainly the loans will be able to support you, seen and considered that the bill is an additional guarantee for the bank that gives a privileged way to meet their credit.
Home-traded loans . On the web you can also find home-based loans! These are loans with bills of exchange that can also be provided to your home, thanks to the activity of agents and intermediaries operating throughout Italy.
A nice comfort if you live in an area not covered by the activity of financial and banks that work with loans with bills of exchange, and you still want to not deprive yourself of the opportunities offered by this form of financing.
3 myths to dispel …
Before leaving, we want to provide you with 3 myths to dispel and 3 tips to follow . As for the former, they are unfortunately made necessary by the confusion that many websites generate in this matter, offering false and misleading information. In particular:
There are no loans changed fast or obtainable within 24 hours . Loans with bills of exchange are in fact paid after the termination of an investigation procedure by the creditor. Whether it’s a more flexible procedure, in which you can close a few eyes, it’s true.
But that is a procedure that ends in a few moments, it is totally wrong, also because it is very likely that the bank or the financial company requires you to activate additional guarantees, which can only lengthen the time of this practice.
Modified loans are not for everyone . Although it is true that there are loans with “easy” bills, and even if it is true that the loans can also be turned to bad payers, it is not correct to say that these loans are really for everyone.
In other words, if you do not have a salary and you do not have a guarantor that can spend the signature for you, you will hardly be able to get this loan.
They are not the most convenient . The loans that have been changed are not the cheapest loans available on the credit market at all. In addition to an interest rate that can be detrimental to that applied by other forms of credit, there are numerous additional costs that will weigh on the convenience of the transaction.
… and 3 last tips for not being fooled!
Now let’s see three simple tips that we recommend you to follow to avoid taking rather audacious rips.
Always look around for better alternatives . The first thing to do when you get closer to the world of loans that have been changed is to always do it together with other alternatives.
In other words, if you can get access to loans with bills of exchange, it is very likely that you will be able to have access to other forms of loans that may even be cheaper.
Therefore, always try to request more quotes in writing by carefully comparing costs, rates and benefits: better wait a few more days, to get to the really most useful solution.
Do not anticipate anything . Remember that you do not have to anticipate any cost, commission, consultancy fees or to start “practice” (at the limit, they will be retained at the time of delivery ). If someone asks you for money in order to facilitate the granting of the loan, you are cheating.
Do not trust too simple and too convenient offers . In life nobody gives anything, let alone money. Therefore, if an offer seems too good to be true, it is probably because it is not. Be defenseless about these offers and be cautious, especially when you do not have serious credentials about who you have before you.