Loan Insurance – Safe Solution for Borrowers – NoHo Arts District

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Loans for large and small amounts are becoming more and more popular. The good news is that you can get a new loan by borrowing money online and transferring it immediately (vay tiền online chuyển khoản ngay). One of the reasons for this is the aggressive marketing campaigns of many financial institutions. Unfortunately, many advertisements rarely mention the possible risks associated with obtaining a loan, from small to large.

Getting a loan – risks

What are the risks associated with obtaining a loan? First of all, these are the risks of non-payment. In fact, there can be many reasons, but they are all combined into one – late payment. At the same time, when signing a loan agreement, the borrower is not aware of the possibilities that will impede its repayment. Some risks can be:

  • Loss of work and impossibility of new employment in the shortest possible time. There can be many reasons for this, from the banal closure of an enterprise to its bankruptcy. Moreover, in the latter case, a person can be fired without severance pay, which will prevent him from making payments for the few months that will be spent looking for a new job;
  • Deterioration of health. Such a situation is also quite likely, and a person may not have a chronic illness, but deterioration in health can come suddenly. This was especially clearly shown by the situation with the recent pandemic. In addition to the loss of income, the costs of a person for treatment, medicines and rehabilitation are significantly increased. There may be no money left to repay the loan;
  • Critical housing situation – fire, flood, other natural disasters. It is possible that the losses will be compensated by the state, but this will take time, at least several months. Moreover, you need to pay off the loan on a monthly basis;
  • The worst case is the death of the borrower. In this case, their debts will be transferred along with the inheritance to their relatives. But they may not be able to repay the loans.

What is Loan Insurance?

The ideal way out of this situation is to take out an insurance policy for a loan. And then, in the event of unforeseen events covered by the policy, the need to repay the loan falls on the shoulders of the insurance company. The payer will only be obliged to confirm the fact of the occurrence of the insured event with official documents. Of course, such an agreement comes into force only after the payment of the insurance premium. But this is already a guarantee that in a difficult situation the payer will not be left alone with his loan. If they are unable to repay the loan for valid reasons, the insurance company will take this responsibility. This option is beneficial to everyone. For a financial institution, the availability of insurance reduces the risks of non-payment, and accordingly makes it possible to reduce interest rates for regular customers or those who are ready to purchase an insurance policy.

Where to draw up an insurance contract?

Please note that insurance companies do not issue loans themselves. Also, financial institutions do not engage in insurance. However, banks can sometimes act as intermediaries and recommend certain insurance companies for loans. However, each client has the right to choose his own insurance partner. It will be enough to contact the insurance company in advance and clarify all the details for purchasing such an insurance policy. The premium will depend primarily on the loan amount. Most often it is calculated as a percentage of it. In addition, they can take into account the financial condition of the borrower and some other factors.

Loan insurance is a reliable solution for borrowers
Loan insurance is a reliable solution for borrowers

Why is it worth taking out insurance?

Life shows that no one is immune from unforeseen situations. And a company that seemed as reliable as possible yesterday may be declared bankrupt today. And natural disasters around the world have become more frequent. Therefore, it is most reasonable to take care in advance to protect yourself in case of non-payment of the loan. If you are late for the next payment:

  • The financial institution will begin to charge additional fees and penalties that increase the amount of debt;
  • Information about non-payment will go to credit bureaus and worsen the credit rating of the borrower, which will make it difficult to obtain the next loan to pay off the overdue one;
  • There may be other problems related to the creditor’s claims to pay the debt.

This situation can be troublesome enough to try to anticipate and avoid.

Insurance company – safe and profitable

The insurance company will offer to provide for the most probable reasons for non-payment and insure the risk of their occurrence. For example, now a serious illness will not become a problem if such a probability was indicated in the insurance policy. When an illness occurs and there is evidence, the insurance company will immediately close the loan – either in full or minus a small percentage specified in the contract. Thus, the risks of getting into trouble due to non-payment of timely payments are minimized. Of course, it is worth noting that the company very carefully and carefully examines the occurrence of each insured event. If any of the terms does not comply with the agreement, payment may be refused. Therefore, before concluding a contract, you should carefully study it. It is important to take the extra time, but discuss with the agent any claims that you think may arise and negatively affect your financial situation.

Choosing an insurance company

Of course, you have already chosen a reliable financial institution for obtaining a loan, for example Oncredit.vn. But the partner must be as reliable as possible. Of course, not all insurance companies are equally reliable. Before concluding an insurance contract, you should study the reviews of the company’s customers. First of all, you should pay attention not to how well they serve clients when concluding a contract, but to how quickly and efficiently they solve the insured events that have arisen, whether they pay the amounts due in full.

Together with the insurance company for safety

Lending is a rather risky business. That is why financial organizations have established mutually beneficial cooperation with insurance companies engaged in credit insurance. This is beneficial for financial companies as it reduces the risk of default on loans and optimizes the interest rate scale. For insurance companies, this is beneficial in that their turnover increases significantly, new customers are constantly arriving, and there is an opportunity to significantly increase the client base. Finally, it is beneficial for the borrowers themselves, because in the event of force majeure, the insurance company will take care of the timely payment of the debt. Such interaction can significantly improve the level of service in financial companies, as well as provide customers with profitable and fast loans. Financial risk insurance will make you feel comfortable in any difficult situation. When signing a loan agreement, take care of drawing up an insurance policy.

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