Loans from banking or non-banking institutions can usually be repaid in two ways, depending on the type of loan – either monthly installments or lump sums. A new option appeared on the credit market – to repay the loan of work. For example, the Loan for Work portal offers you the opportunity to work out the outstanding amount. Is this offer in accordance with applicable legislation? And what conditions apply to it?
Redeem the debt
Although many people may find it interesting to redeem their debt through work, they should be wary of the terms of this offer.
The loan for work offer does not differ in application from similar loans of this type. It is possible to apply online, only an ID card is required. After approval, the applicant will receive the money within 15 minutes (hence the term quick loan). Payment can be made in two ways – either by transferring money to a bank account or in person at a branch in cash. When applying for a loan it is not necessary to prove what the borrowed money is for, nor, according to the provider, there is any need to prove your income.
The existence of a stone branch with this type of credit provider is not customary. The Loan for Work project is based in Prague 9. Even on Wednesdays at 5 pm, it offers the possibility of consulting personal finance.
Parameters of the loan and the possibility of repayment
In the framework of a quick loan, the maximum possible amount is USD 8,000 with a maturity of 30 days. The first loan is free of charge, without fees and penalties. Anything overdue then bears interest, but what the total cost of the loan at a specific amount and with a specific maturity can not be learned from the website.
Specific is the repayment of the loan, which can take several forms. The title of the project presents the first possibility to repay the loan – by work. However, the money can be repaid as usual. Everyone can choose the method themselves according to what they prefer.
In addition to a quick loan, the applicant can apply for a loan with a pledge (as opposed to a pledge of a car or real estate, without checking the registers, with payment in cash immediately ). The fixed interest rate of this loan is 66.66% pa, which is definitely one of the more expensive loans. With a loan of USD 30,000 with a maturity of one year, the candidate will pay almost USD 12,000. However, the maximum possible amount that can be borrowed, or the maximum repayment term, does not follow from the website.
How can the loan be worked?
If the borrower chooses to repay by working, and if the loan is actually approved, he will receive a brief training in the area of his choice. You can choose from:
- delivery of food,
- passenger transport,
The amount of remuneration provided for the work differs. After the loan is repaid, one can decide whether to quit or continue to earn such work, even in the form of a temporary job.
Although the idea as such is certainly interesting and many people will appreciate it, it has its own. One of them is a situation in which you know practically nothing in advance. There are no complete conditions for granting the loan, repayment conditions, any information on contractual penalties and sanctions, and above all the price of the loan itself. While on the Internet it is stated what the remuneration is for specific works, but according to representatives of the Loan for Work project, this is more of an indication.
Without a personal visit and a specific inquiry, the candidate also does not know who actually provides the loan, respectively. whether or not it is authorized to provide such funds at all. This is in itself contrary to the Consumer Credit Act, which requires maximum client information. Moreover, the difference is whether the company mediates or directly provides the loan.