What is the previous analysis to grant a payday loan?

When applying for financing, the requirements and the credit approval process will vary considerably depending on the type of loan we request and the financial one. In general, Payday Champion offers these types is more flexible when granting loans, we will demand fewer requirements and less paperwork. However, banks are more demanding and carry out a risk analysis prior to the approval or denial of personal loans. In this article, we analyze what this analysis consists of and what factors it takes into account.

A thorough study of the credit history and customer defaults

The entities check if we have requested another loan at some point in our life, to check if we have been able to repay the loan without problems. Banks access this information through the database of the Risk Information Center of the Bank of Spain, better known as CIRBE. In this database, our past and present credits remain registered, in the case of enjoying one at present.

This information is directly linked to the payment history, since the entity will check if we have outstanding debts of any previous credit, or even of other services, such as payments of electrical, telephone, etc. supplies. To identify these defaults, the entity accesses the various existing default files, such as ASNEF or RAI. If we have outstanding debts and we are registered in any defaults file, no traditional bank will grant us a personal loan.

Do we have a sufficient payment capacity?

In direct relation with our credit history, the entities will take note of our ability to pay to approve or reject the granting of financing. To check whether we will have problems or not to repay the debt, the banks set a series of requirements, that to comply with them would mean that we are solvent enough so that the entity lends us money without taking too much risk.

For this, any entity to which we request a personal credit will ask us to provide you with a receipt of income, a payroll for example, and an extract from the bank account to check the inflows and outflows of money during the last months. With the payroll, pension or proof of income, the bank ensures that we receive a remuneration high enough to pay back the debt, which we receive on a regular, constant and lasting basis over time.

Apart from the economic requirements, banks also require, when granting a personal loan, that the customer be of legal age, resident in Spain and, in some cases, be a client of the bank or increase the degree of connection with the entity, through insurance, which in turn will reward interest on financing.

If we do not fulfill some of these characteristics, the bank will not offer us the loan, so we would have to go to private equity companies.

Consumers paid over 600 million euros too much for loans in the first quarter of 2018

In the first quarter of 2018, consumers in Germany borrowed 27.17 billion euros. Those who completed their loan on the Internet paid on average 1.85 percentage points less interest than the national average. Had all borrowers completed their loan on the internet, they would have saved a total of 612.1 million euros. This is shown by data from the Bundesbank, Schufa and the credit portal smava.

Alexander Artopé, co-founder and CEO of smava

Alexander Artopé, co-founder and CEO of smava


“Few are aware of how large the price differences in loans are even in the current low-interest phase. That’s why we create transparency and want to encourage consumers to compare their credit prices, “says Alexander Artopé, managing director of smava.



Interest rates have fallen more sharply on the internet than the national average


Installment loans were on average more favorable in the first quarter of 2018 than in the annual average for 2017. According to the Bundesbank, the annual average interest rate on installment loans was 5.64 percent. This is minus 0.11 percentage points compared to the annual average for 2017. The effective annual interest rate for loans concluded on the Internet fell even more sharply. According to information from smava, it fell by 0.29 percentage points to an average of 3.79 percent in the first quarter of 2018. In the first quarter of 2018, online installment loans were 1.85 percentage points cheaper than the national average.


655 Euro instead of 978 Euro – Online Credit Saves 33 Percent

According to information from Schufa, the average installment loan amounts to 8,854.60 euros and has a term of 45.6 months. In the national average, it cost in the first quarter of 2018 on average 977.70 euros in interest. The average installment loan on the internet cost an average of 655.38 euros in interest during the same period. That’s a price difference of 322.32 Euro (33%) per loan. Adding up the price difference per loan to all new installment loans (1.9 million), which were newly concluded in the first quarter, according to Schufa, it becomes clear that the savings potential amounts to a total of 612.1 million euros.


Hardly any awareness of price differences

According to Schufa, an average of 1.46 loan offers are compared in Germany before a loan is concluded. “That is very little compared to the total loan offer. This is also related to the fact that the comparison of branch credit offers is complicated, unpleasant and hopeless. I have to go from branch to branch. Always reveal me to a stranger. And in the end, no matter how many stores I visit, I never have a comprehensive overview, “says Artopé. Without knowing it, many consumers pay too much for their credit.


Trend goes to online credit

According to a GfK market study on consumer and motor vehicle financing on behalf of the Banking Association, the share of credit on the Internet has increased since 2015 from 21 to 27 percent in 2017. “More and more consumers realize: On the Internet, I get the same or even better performance on more favorable terms. So I benefit from the credit on the Internet, “says Artopé.


Going online is not enough – you can only save money with cross-bank credit comparison

Going online is not enough - you can only save money with cross-bank credit comparison

“If you only go to a bank, you usually pay too much money,” says Artopé. Banks are often focused on selling their own loan products. “A comparison of several banks is therefore very rewarding.” Who does not go from branch to branch and every time wants to reveal strangers, can use credit comparison. With them you can compare several loans from different banks. According to the portal, in the case of smava, there are currently 70 loans from 25 banks.