Norwich, Connecticut is located in New London county. It is 28 miles SE of Manchester, Connecticut and 77 miles SW of Boston, Massachusetts. Groton-New London Airport provides facilities for air transportation. Total population is 39,567. 48.5% and 51.5% – male and female share of the population. Median age is 38. 40.2% is the rate of couples married. $66,378 is median income per family. 14.1% is the poverty rate. 29% is the rate of issued payday loans in Norwich, CT. Median gross rent is $1,028. Median house value is $162,900. Standard Zip codes are 06360, 06365. Time zone is America/New_York.
What are payday loans Norwich, CT?
The meaning of payday loans Norwich CT is the provision of unsecured loans to borrowers who do not have a permanent income as wages (small farmers, private entrepreneurs), i.e. they cannot provide standard collateral. Moreover, on payday lending market, collateral may not be of great importance to creditors, since the cost of foreclosing on such collateral and its sale may exceed the cost of the loan itself. The lack of collateral, however, increases the cost of financing, because the lender bears the risk of non-payment or complications upon receipt of payment. Very often, interest on small loans can be several times higher than those paid for ordinary lending.
Why are interest rates in payday loans Norwich Connecticut higher than in traditional banking options?
Payday loans ares designed for low-income borrowers who are at higher risk to banks. As follows from the standard logic of lending, the higher the risk of investment, the higher the interest rate and compensation for the lender. Banks and other creditors want compensation for the possibility of not paying their money back. High interest rates, which can worse small businesses, ensure that the lender gets some return on investment.
At the same time, microfinance rates may differ greatly from traditional bank interest rates. According to The Wall Street Journal, microfinance rates can exceed 30%. While the risk-to-profit ratio for lending to low-income individuals is part of the deal, microfinance scenarios usually cost the bank more, especially in cases with foreign investments. For example, loan officers often have to travel to businesses in low-income areas, rather than a potential borrower visiting their local bank branch to learn about loans.
Although these interest rates are considered astronomically high compared to traditional bank loans, the lender will still check the borrower’s finances to make sure that repayment is within the borrower’s capabilities.
What is the difference between a payday loan and a bank loan?
The main difference between a payday lending company and a bank is that it helps citizens in need with money for a short term, for example, for one day or 3 weeks. The first microfinance organizations (MFOs) were established at the end of the 20th century in the “third world” countries. Their goal was to help those people who were below the poverty line.
What is the difference between a bank loan and a loan in an MFI? The bank can issue you money at a lower interest rate and for a long time, for example, for 5 years. But in return, the client needs to collect an impressive package of documents, but MFIs can borrow money only for an ID, where a permanent residence permit is indicated. Of course, the interest rate of MFIs is significantly higher than the bank rate. However, given the short repayment period, as well as the small loan amount, the entire overpayment in the MFO will be quite small.
What are the advantages of payday leding options?
There are several advantages of a payday loan Norwich CT at once. The first is the speed of loan issuance. For example, your application will be reviewed as quickly as possible, from ten minutes to an hour. The money can be received on the day of the application. At the same time, you will not have to wait for verification of documents, approval of the amount and interest for several days.
An important advantage is the convenience of taking out a loan. Now most microfinance organizations provide the opportunity to apply for a loan online. All that remains is to come to the office for the money. And some MFOs can even issue money directly to the card.
When issuing a loan from banks, many face a problem: people working informally are usually denied a loan. But MFIs do not require official confirmation of income, certificates, etc. Often, it is enough for the borrower to say that he has a job and an income, the level of which he is ready to define. The MFI won’t also ask for a colleague’s contact phone number.
Retirees can also take out a payday loan, because the age limit is 75 years old at the time of the loan. And young people do not have to wait to turn 21: MFIs issue loans to people from 18 years old.
If you take out a payday loan Norwich for the first time, then in addition to your ID, you may be asked for a second document (for example, SNILS, driver’s license, TIN or something else), when you re-apply, you only need an ID. The only term is that a permanent residence permit is required in the region of the MFO’s presence.
A significant advantage of microfinance is that a loan can be obtained by a person with an imperfect credit history, or without it. Some people even use microloans as a way to improve their credit history in order to easily get a loan from a bank in the future.