November 17, 2019

Finalized or personal loan: when is it convenient?

One of the first classifications that can be made among the various loans is that between finalized loan and non-finalized loan. Then within the first category, with the evolution of the various products, we can today distinguish:

  • those that provide for different redemption options, such as car and motorbike leasing;
  • classic finalized loans which provide for the payment of a fixed installment until the end of the repayment plan, immediately becoming owners of the asset;
  • loans granted in advance, for example with vouchers that can be spent in affiliated shops.

In the latter case, the credit institutions that offer this type of loan make a certain amount available to the customer as a preventive measure, which must be used within a certain period (for example 30 or 60 days) precisely with affiliated partners. The reimbursement plan will start only when the purchase is decided, while if you do not proceed with the purchase, you will not have to pay any installments or related costs.

What all these (apparently different) forms have in common is the need to contact a vendor affiliated with the institution that grants the loan, remembering that by definition, if the financing is finalized, it is in turn subject to the purchase of a specific good .


Differences between finalized and personal loans

personal loan

As we said at the beginning, both targeted and personal loans are ‘functional’ to the consumer credit system, of which rules and regulations must logically follow. Having said that (and regardless of the mere definition) what differentiates the personal loan from the finalized loan? First of all, the obligation to indicate the use that will be made of the financing obtained, which is not envisaged in the personal ones, while it is present in the finalized ones.


How to access it?

personal loan

There are two traditional channels of access to the “finalized” form, namely:

  • by directly contacting a bank or a finance company, which provides, for example, a car loan within its offer, therefore specifically intended for the purchase of a car.
  • going through the service offered by the seller of the property (also online) that must be purchased which, in turn, will have entered into agreements with a financial company or a bank. Among the most common are PutUp Finance, Ardose, Fedilia, United Easy Bank, Onecredi, Lendomestic. In many cases the sellers of certain products (cars, household appliances, etc.) rely on loans that the ‘internal’ banks offer at rates that are on average lower than the market average.

These types of loans should not be confused with those typical of revolving or revolving credit lines, as these are sums that are (with some exceptions) usable as it deems appropriate, to be then repaid according to what is defined in the contract of financing, in the manner and with the expected interests, without obligation to justify.


Which is cheaper?

credit loan

In principle, the principle according to which it is the “risk” that drives a bank or a financial company to apply higher or lower interest rates always applies. Precisely for this reason, in general, the interest rates of the targeted loans can be lower compared to a personal loan where there is no objective guarantee (for example the car or a valuable asset, etc.) of the purchased object. In fact, in a finalized loan, the lender can redo the asset, object of the loan request, in the event of non-repayment of the loaned amount.

These are logically generic speeches that can vary considerably also depending on any promotions. It is therefore necessary to make more estimates to be compared, analyzing the orientation of the market and evaluating the presence of offers that can present attractive reward rates up to the 0 rate.


What could be the best way for you?

best loan

Without these necessary premises, even if you are oriented to choose the finalized loan, there may be different levels of convenience. First of all between ‘doing it yourself’ and requesting financing from the seller, this second way is the simplest one (it will be the seller who will have to take charge of the request procedures and follow the practice, already having in hand the documents necessary to prove the purpose as a quote, etc.) and, in most cases, even the cheapest.

As mentioned, in fact, in order to guarantee a certain volume of loans, credit institutions are better prepared to offer cheaper rates, compared to what happens instead with individual individuals.

For example, when it comes to car loans, if you have to choose between “internal” financing (that is, a bank of the group or an affiliated one) or external, the first ones are almost certainly, at least for what the l experience, those with the best conditions. Once again, before deciding, it is always advisable to have a quote for each type of loan that may be requested, and compare them.


The importance of consulting

credit loan

However, it is also necessary to evaluate the credit policies, which sometimes make it possible to make the request only to a limited number of proposers. The experience of the sellers, also from this point of view, can be a valuable help, especially when making more particular requests, such as in the case of an application without a paycheck, but using a guarantor or another type of income certification, etc.

Attention: moving away from a standard practice, for example when you need to insert a guarantor for the purchase of a car or a surety policy for the financial one, the possibility of being able to choose completely neutral between the different channels which offer access to typical targeted funding, can be significantly reduced.


What alternatives?

financial loan

Finally, we must also consider the fact that not always becoming owners of an asset right away can be the best choice. A typical example is found with car leasing, which can make the possession of a vehicle more flexible according to the changing conditions of personal and / or working needs. Also noteworthy is the greater ease of access starting from the preliminary investigation times, usually faster than traditional loans.