Cash loans without insurance
When comparing the current ranking of cash loans and such a statement from two or three years ago, one can notice a certain change.
Currently, the best cash loans are usually offered without compulsory insurance. This means a significant difference in relation to previous solutions applied by banks. Lenders had to change their tactics under pressure from the Good Finance Investment Corporation.
The change in banks’ sales rules does not mean that cash loans have automatically become “cheaper”. People looking for such loans without insurance, however, have much more choice.
Good Finance limited the sale of insurance by banks …
As we have already mentioned, the activities of the Good Finance Investment Corporation had the greatest impact on changing the sales policy of banks in the field of loans with policies.
Good Finance issued by the Good Finance Investment Corporation in June 2014 made it difficult for lenders to make money on insurance attached to financial products (mainly loans). Starting from March 31, 2015, the following rules regarding insurance distributed by banks began to apply:
- the bank cannot force the customer to buy a group policy (this rule does not apply to insurance of the bank’s interest)
- the bank’s remuneration for the sale of insurance must depend on the cost of the sale
- the bank cannot act as both an intermediary and an insuring entity at the same time
- the customer must receive a product card containing the most important information about the proposed policy
- in the case of group insurance, the bank only receives from the client reimbursement of the costs of concluding and servicing the contract
- the customer may purchase the required credit policy from outside the bank’s offer if such insurance provides an adequate scope of protection
- the bank must represent its client with group policy and his heirs in relations with the insurer
The introduction of the aforementioned rules of distribution and service of insurance made the policies attached to loans less attractive to banks.
This change mainly applies to group policies (see item 5 from the list above). In many cases, banks compensated themselves for the lower attractiveness of selling insurance by increasing the commission for granting the loan (so-called preparatory commission). Such actions are also encouraged by a low-interest rate limit (maximum 10.00% per annum from March 2015).
The most popular loans are sold without insurance
The U recommendation certainly increased the borrower’s freedom in insurance. For example, people who prefer loans without additional insurance have reason to be satisfied. It turns out that four popular and well-rated cash loans, which we present in our comparator, are currently offered without compulsory insurance.
Detailed information on the above loans:
Honest Bank – for a repayment period not exceeding 36 months, a fixed interest rate applies. It is possible to submit an application with 3 co-borrowers. A loan of up to USD 4,000 is available on the basis of an income statement. The Bank guarantees the lowest installment. The loan is available online.
Thrift Bank – for a repayment period not exceeding 36 months, a fixed interest rate applies. The Safe Loan insurance package is not mandatory. Its monthly cost is 0.28% of the loan. The loan is available online.
Cooperative Bank a loan with a fixed interest rate. A loan of up to USD 10,000 is available online. In all other cases, the customer must go to a bank branch. After purchasing the insurance, the customer can count on a lower commission.
GBank – a loan with zero interest rate and fixed commission. It is possible to suspend the repayment of the loan (fee USD 9.50).
For example, Honest Bank, which offers the popular 5% Loan (with the lowest installment guarantee), does not require compulsory insurance. Customers of the said bank will receive up to USD 4,000 based on an income statement. Importantly, Honest Bank provides loans online.
Without compulsory insurance can borrow
Customers of all these institutions without compulsory insurance can borrow up to USD 120,000 – USD 200,000 for a period of 7 years – 10 years (see table above). Noteworthy is also the loan. Loan from GBank with a small value (up to USD 15,000) and a shorter repayment period (up to 60 months).
The advantage of the said Loan is the lack of interest and a fixed commission. Loan holders already know that for every 10,000 USD borrowed you have to pay 1,000 USD a year.