It is a contract in which a lender grants (or acquires the commitment to grant) to a consumer a credit in the form of deferred payment, or loan or an equivalent financing formula.
In other words, it is a short or medium term loan that is granted to obtain freely available money. It is called consumer credit or consumer credit because it is usually used to invest in consumer goods.
What regulations govern a consumer credit?
The rules governing this type of financial product is the Law on credit agreements for the consumer. The consumer may not waive the rights recognized in this Law, said resignation and acts contrary to this law null.
The Law applies to those contracts in which the lender grants or agrees to grant a consumer:
- Credit in the form of deferred payment
- Credit opening
- Any equivalent means of financing
The consideration of consumers is limited to natural persons who act in an area outside their business or professional activity.
For the purposes of this Law, consumer loans are not granted to legal persons in any case. Nor are consumer credits granted to individuals if the purpose is related to their business or professional businesses.
What credits are not governed by the regulations?
- Those with mortgage guarantee or pledge, although in the case of the pledge only those in which the liability is limited to the good are excluded.
- Those whose amount is less than 200 dollars.
- Those discovered less than a month.
- Those who do not have any cost, or without the return period is less than 3 months, the expenses do not exceed 1% of the nominal.
- Those that grant companies to their workers in special conditions.
- Derivatives of judicial transactions or debt refinancing without added costs.
One of the key points of the Law is everything related to information. The Law facilitates the definitions of each of the concepts and includes in its annexes standardized models to supply it.
What is a mini credit?
It is a type of personal loan. The mini-loan is designed for returns in the short term and not very large amounts. The mini-loan amounts can be arranged quickly.
In 2013, with the banking crisis. Banks more focused on capturing liquid than granting credit. It is when private lenders appear who began marketing mini-credits through the Internet. They cover a niche market that traditional banks stopped supplying. Most of these companies operate online and by telephone and their use is intended for the purchase of consumer goods for the provisional coverage of other debts.
What regulations govern a mini-loan?
They are not regulated by the bank on distance marketing of financial services for consumers. Its main objective is the regulation of the remote contracting of financial services with consumers and in this concept many types of legal acts and businesses of varied typology enter.
Is it worth a mini credit?
The money is provided in such a way that it tries to prevent the people who receive them from falling into recurring and lasting debts over time. That is, it is about advancing amounts of money small enough to be comfortably reimbursed in short periods of time.
In this way the primary role for which this type of operations was created is fulfilled: to provide individuals with urgent loans especially to be able to meet unexpected expenses.