Microloans are a popular financial instrument in Russia. They allow you to quickly receive a small amount and repay the debt just as quickly. But sometimes borrowers have difficulties and it becomes impossible to pay for a microloan. In this article, we answer what will happen if you miss a loan deadline. We dwell in detail on the specifics of microcredit and tell you what to do when you have nothing to pay off the microloan with.
What is a microcredit?
Microloans are issued by microfinance organizations (MFOs), which come in two types:
microfinance companies (MFCs), which can issue up to 1 million ₽ to individuals and up to 5 million ₽ to legal entities;
microcredit companies (MCC) that issue small amounts of money to the population.
The most common on the market are MFCs, whose activities are gansu mobile number database strictly controlled by the state. The state intervenes in the work of MFCs only in case of incidents. MFCs are considered less reliable and often have many negative reviews related to extremely unfavorable lending conditions.
Differences between microfinance organizations and banks
There is a significant legislative difference between MFIs and banks. Banks are credit organizations accredited by the Bank of Russia. Their activities are strictly regulated and are not limited to lending.
Microfinance organizations only issue loans. Their differences from banks:
small amounts of microloans. On average, you can get up to 5 million ₽ from a bank within the framework of a regular consumer loan. If the bank issues a loan with security (for example, a mortgage), the maximum amount is even higher. And in an MFO, an individual cannot take more than 1 million ₽. On average, the amounts of microloans are significantly less than this upper limit;
high rates - MFIs can take up to 1% per day. If you stretch out the repayment of the debt for a year, the borrower will return several times more than he received. Microloans must be repaid very quickly, and this option is provided.