Understanding Loan Costs

Microloans online are popular in the USA. The consumer online lending market worldwide is represented by two main areas:

• payday loans - (urgent loans, quick and convenient for customers);
• installment loans (short-term loans up to one year with partial repayment).

At present, the loan and installment loan market is still in a state of development, as confirmed by the appearance of large firms every year.

Microcredit in the USA

About 350,000 microloans are issued daily in the United States. At the same time, the maximum interest rates in the United States can reach up to 3% per day. There were more microfinance companies in California in 2004 than McDonald's and Burger King restaurants. The average microfinance loan in the United States is $9,732, ten times higher than the average microfinance loan in developing countries.

In most countries of Europe and the USA, payday loans can be issued to persons over 21 years of age. Personal loans are most actively taken before the holidays and vacations. A decrease is usually observed in the summer months.

Americans take short-term loans to earn money. Small business loans allow owners to more effectively manage their operations without interrupting production processes. At the same time, 67% of borrowers show a significant increase in their income as a result of "timely insurance" of the business.

Making microloans in terms and rates

The largest part of loans is taken by people from 26 to 40 years old, their percentage ratio is 50% from all clients who take payday personal online loans. Next come customers who are from 21 to 25 years old, such customers are 23%, then people who are from 41 to 60 years old, such borrowers account 21%. The smallest percentage, only 6% of people who are over 60 years old.

Also interesting fact is that most often microloans are issued for unmarried people, as many as 59% of them. Then come married - 36% and 5% of those who are divorced. On average, people can take from 7 to 10 microloans per year, they can arrange such a loan for not very large purchases, for example, for the purchase of equipment or home repairs.

Clients will often receive personal loans on average from 1,500 euros, take an average of 7,000 euros on their business development. If you take the United States, here the loan amount can range from $500 to $4,000 per microloan.

By the terms for which microloans are issued, they can vary on average up to 30 months, this is in the case of a personal loan, and also from 41 months in case of a loan for small business.

The average interest rate on a personal loan is approximately 19%, while a business loan is somewhere around 10.7%.