Loans, consumer credit still in crisis

The Italians do not consume and avoid applying for loans, which, among other things, banks are making more difficult. Loans are very versatile loans, useful to meet the most varied needs of consumers. Those who are looking for an advantageous credit offer can compare the loans of the main banks in order to understand which one is the most convenient.

The data analyzed and disseminated by Lite Lending, the Italian Consumer Credit and Real Estate Association, indicate that 2013 is proving to be an even worse year than the previous one, already dramatic in itself, since in the first seven months it fell by 6, 2 % the demand for Italian consumers’ online or offline loans, which had fallen by 12% last year, again in the first seven months.

 

Credit Crunch in Italy

Credit loan

The credit crunch in Italy has decreased the total volume of requests for loans from consumers by as much as 15 billion in just five years. Taking into account that Italians are historically a people who have always had a good level of savings which leads them to not require as many loans as in other countries, we can say that the situation of consumer credit in Italy is definitely at an all-time low.

The type of loans that most suffered the collapse are loans for car purchases, which fell by 7% and with a disbursed volume of over 5 billion less than in the first seven months of 2012, in parallel with the heavy stagnation of the car market same .

Of course, mortgages and personal loans also went down, only loans aimed at the purchase of household appliances showed a recovery, probably thanks to the extension of the tax breaks for home renovation, also extended precisely for class A furniture and appliances.

 

It goes without saying that the crisis has undermined the incomes

consumer loans

The salaries of the Italians, who, although perhaps more in need of financing, certainly cannot provide the necessary guarantees to banks and credit institutions; as Cris Bartolome , president of Lite Lending says: “The consumer who perceives the uncertainty of income does not consume and does not ask for loans. We would need a recovery in consumption, also linked to taxation, to hope to reverse course “.

What to do when the interest charged on the loan is abusive?

Whoever contracts a loan or a financing must always be aware of the clauses related to the interest charged. In many cases, charges can be considered abusive, that is, when they are above the average charged by the market. There are some precautions that can be taken to avoid this situation and measures to get rid of it.

Access to quality information has enabled many people to further study their rights as citizens. The individuals then began to learn more about financial education. Thus, the fight against overcharging is increasing.

What the Consumer Protection Code says

money

Article 39, item V, of the Consumer Protection Code (Law No. 8078/90) says that banks and financial institutions are prohibited from charging excessive advantage over loan or financing contracts. Article 51, of item IV, states that the contract clauses that establish abusive obligations are null and void.

There is no law that determines the interest rate limit. It is done according to the collection of the other institutions. The Central Bank is responsible for gathering average interest rates. It has a historical series of various types of financial concessions: personal and corporate credit, vehicle purchase, overdraft, etc.

How to identify abusive interest

money

The Central Bank’s indexes show the average rates charged in the market. If the person feels injured by abusive interest (that is, when the amount is higher than the registered average), he can appeal to the Common Justice, the Consumer Protection and Defense Program (Procon) or to Special Civil Courts.

The recommendation is that the individual look for a specialized professional to perform the contractual review. Then, if abuse is found, in fact, it must be filed.

Knowing how to identify abusive practices is essential for people’s health and financial education.

When the abuse is identified, the bank must return the individual or company. There are three ways the institution can do this:

  • Reduce the value of the installments charged;
  • Return of money that was charged more than the individual;
  • Cancellation of contract.

How to escape abusive interest

How to escape abusive interest

Many people and companies take out loans without even knowing the fee that will be charged. On the other hand, there are those who are aware of this, but need the money. We have listed some practices that will help you escape high interest rates:

  1. The first tip is perhaps the most difficult: avoid asking for loans and financing. Have your emergency reserve and use it when necessary. Also, try not to have superfluous expenses. Usually, they are what make us go into debt.
  2. Understand what interest is, how it is calculated, and what you can do when you become a victim of financial abuse.
  3. Read the agreement in full before signing it. Know exactly where you are stepping and what you owe the institution. It will also be possible, only with a careful reading of the document, to know if the collection is excessive.
  4. If debts cannot be avoided, try to pay on time. Late payment can add more charges.
  5. Attention to parcels. Your budget has already been affected by the payment of the financing or loan installments. So, avoid creating more expenses and grow the problem.
  6. The customer may, after the contractual review, demand a refinancing of the debts. Try to understand at this moment which are the cheapest lines of credit. If you can take out a paycheck loan, choose this credit line, as it usually has the lowest interest rates.

You want to continue receiving information from Lite Credit, register here.