Credit without proof, to be used with care

Posted on February 25, 2016 by Marion

Credit without proof, to be used with care

Some financial institutions do not grant credit without justifying its use by the borrower while other donors freely grant a loan without proof. Borrowers can thus use the amount borrowed as they wish without having to justify its use. You have to be careful, because this type of loan can quickly become a source of over-indebtedness if not used wisely.

What is a credit without proof?

Debtors looking for resources to finance their personal projects can apply for a credit without proof online . Unlike the affected loan, it does not require proof of purchase or use. Debtors are thus free to finance their vacations, home improvement or decoration work, household equipment or even contingencies.

Before granting credit without proof of employment, the lender always ensures that:

  • The borrower is solvent, that is to say able to repay the credit to avoid bankruptcy and over-indebtedness of the beneficiary,
  • The debtor provides proof of resources, among other things, the latest payslips, bank account statements, tax notices, etc.

Only after that the debtor can use the funds received as they see fit. Even if a credit without proof seems simplistic like that compared to other types of consumer loan , well, the lenders only give up after they are sure of being repaid. It also imposes very high interest rates or guarantees.

Source of over-indebtedness, just in case ...

Households cannot cope with the repayment of credit sometimes contracted by not paying careful attention to its unjustified use by financial institutions. They are thus forced to put together an over- indebtedness file. They must, in this case, appeal to the over-indebtedness commission attached to the Bank of United States.

According to the last publication of this hexagonal primary bank, 42.3% of the files received in 2015 concern consumer loans with an average level of debt of 20,954 US dollars. Revolving credit is a concrete example of this, as lenders do not ask for any justification for using this loan. It is no wonder that it was responsible for 23.1% of household debt in 2015.

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