The stock exchange is a swing and traditional yields cry. It is ethical finance to pay more and better.

Italians are a people of savers, and this has saved us on the occasion of the international financial crisis.

But precisely because we tend to put savings aside it is also good to understand where and how to invest.

And here the effort begins. The stock market is too volatile, the brick is in crisis, bank yields and government bonds are at an all-time low. Whichever forum you consult, whatever the common opinions, it is Smartika’s “social” private loan model that guarantees the highest earnings, averaging around 5 percent gross with a peak of 6.5.

But let’s make a comparison, bearing in mind that also the capital accumulation plans or investment funds include equity and non-equity shares.

Social lending

In addition to guaranteeing the significant return referred to above (5 / 6.5%) Through the Smartika platform, authorized and supervised by Bankitalia, small amounts (from 100 to 100 thousand euros) and with ethical and social objectives can also be invested. The investment is in fact on people, on their development, on consumer credit, on the continuation of studies with positive effects on the country’s economic, (GDP), employment and cultural growth.

It is then a safe investment, already widespread in the US, China, and UK,   and guaranteed by a protection fund to cover all or part of the invested capital. The default rate of creditors is limited to 2.5 percent (against 6/7 percent banking).

The dance of the Brick .

The traditional investment of Italians is brick, but between 2007 and 2015, real estate lost 27.2 percent in Milan and 46 percent in Bologna (Tecnocasa data). Only last year the decline was 2.5 percent and the previous year by 4.4. This year, if all goes well, the market should remain stable (zero growth Assofin data)

Business Square in swing

Since the beginning of the year (data updated to July 14th last) Borsa Italiana FTSE MIB, the main index that collects about 80 percent of the Italian capitalization, that of the major national companies, has fallen by 19 percent losing a fifth of its value .

Government bonds.

Once they were a safe, today they do not pay. The Bund, the German government bonds that are the reference point for the spread calculation (differential) with other European securities, thus measuring their solidity, are so sure that they do not make anything (- 0.54 percent at 12 months, minus 0.59 to two years, – 0.016 to 10 years and 0.518 to 30 years).

It’s a bit better, but not enough, with our Bots, whose one-year rate is negative (- 0.012 percent). The three-year yield is 0.067. At ten years of 1,499 and at 30 years of 2,622 percent.

Cash in the bank?

The rate of the European Central Bank on interbank lending is now negative (-0.35 per cent). As a result, current accounts make little or no. It goes from 0 to 1 percent when it’s OK. Unrestricted deposit accounts travel around 0.5. Those tied to three months repay with 1 percent and those two years with 1.80.

To you the choice.

Safe and convenient: it’s time to try ethical finance. To start with 100 euros are enough

In Europe, social lending is worth € 8.6 billion and is still growing, so much so that the Financial Times has defined this type of investment as “mainstream finance”.

And in Italy? The numbers are increasing, but the lenders’ approach is still a little wary.

The most widespread fear among lenders is that it is risky or that everything can be lost, but these are clichés still linked to a lack of in-depth knowledge of the system. , the leading social lending platform in Italy, explains this with the numbers.

And since the numbers are not opinions, reflection can be useful.

Selective entry.

Social lending does not mean giving credit to people who can not have access to credit by normal means. Rather. In , only 8% of requests are approved (against 35 – 40% of the banks) precisely because the entry criteria are very strict (double check even documental).

A guarantee for everyone. Without wing which the system does not work.

Do the creditors pay?

Thanks to the selection of entry and the efficient recovery entrusted to two specialized external companies, in the default rate is 2.5 percent against 6/7 percent of the banks.

An extra protection.

In order to guarantee further protection and make the investment practically safe, in January 2015 the company set up the ” Lender Protection” Guarantee Fund which, up to the capacity of the fund, guarantees reimbursement up to the full amount (100 per one hundred) capital invested in the event of non-payment. The fund comes into operation after a year (12 installments) of arrears.

How much do you earn?

The interest is established by the lender and not by , but the yield is around an average of 5 percent gross and up to a maximum of 6.50. The rate changes according to the risk profile of the creditor, which at the time of entry is given a score that determines its solidity. The profiles are “conservative”, “balanced” and “dynamic”

And if you want to try …

You can even start investing only 100 euros. A minimum commitment to understand how finance and ethical loan work.

The technological revolution of finance. With an eye to the social

Ideas, projects and SartUp that simplify life and make money travel online: from Crowdfunding to Social Lending, thanks to the web, money gains a social value.

Numerous magazines and international magazines, a little less in Italy, dedicate weekly space to the so-called FinTech , a new way of doing finance through innovations and the most advanced web platforms, a new field of the economy that every day overlooks startups and farsighted companies with some common strategic traits. Firstly, a ” disruptive ” approach to the old finance and the “bad practices” that in the past have characterized the sector (an example of all the high risk speculation by financial operators, which led to the crisis of 2008 / 09). Secondly, the trend towards ” mobile-first ” (or, in general, to ” online-only “, given that the business applies exclusively to internet platforms). And finally, a philosophy of development linked to the social utility of the new business.

In most cases, therefore, they are Start Up, not tied to the traditional paradigms of the economy, which are ready to intercept the new needs of the consumer / investor and translate them into practice in a “smart”, simple and flexible way. And above all the result of an idea in many brilliant cases.

Some examples? The security of the management of its financial portfolio, the speed in money transfers, the management via mobile or, in the case of peer to peer lending, the simplicity and immediacy in access to credit with respect to bank procedures, linked to a social and support and almost direct help towards other people who have a need to meet.

Social utility is one of the factors that brought and leads Fintech to a constant and continuous expansion, an end that finds much consensus among web users and among the big inventors of what made the web an integral part of life of all. An example is given by the founder of Twitter, Jack Dorsey, who decided to invest in Square , a platform that aims to improve electronic payment transactions through the analysis of taxation, financial forecasts and customer assistance in the diversification of own portfolio of investments.

And speaking of Big, let’s see who, on a global level, are the most famous startuppers, AD, entrepreneurs who entered the financial market with this innovative key.

Most are men, but two women are cropping up an important space lately. They are Claire Cockerton, English, Level39’s manager, but above all CEO of Innovative Finance , which deals with financial transactions carried out on tech platforms related to smartcity. The other is the American Shivani Siroya, founder of InVenture , a company that deals with access to credit for small and medium-sized businesses through online and mobile platforms, with a particular focus on the emerging markets of India and Mexico.

In general, the most successful innovators operate in countries where finance plays a leading role in the economy: the United States, Canada and Britain.

Stephen Ufford arrives from the USA, who has repeatedly ventured into start-up projects of financial start-ups succeeding in bringing four companies to success, including Truliio, which deals with the financial reputation of companies and investors through the verification and monitoring of identity. digital. Jeff Stewart, however, founded Lenddo, a microcredit platform that deals with access to credit for those who are part of the American middle class . And then, of course, the US Lending Club, one of the first and most important operators in the Social Lending market, led by Renaud Laplanche.

And then Anthony Macciola, who created Kofax , which manufactures software aimed at facilitating requests and access to mortgages and incomes in the large real-estate market or Karl Martin, Canada, founder of Nymi (former Bionym), a project that deals with digital identity, this time with the aim of protecting personal and financial data through biotechnologies for managing access to financial app (for example, a wristwatch that measures heartbeats and allows access to online accounts ).

Finally, from Great Britain Kristo Kaarmann who, by driving TransferWise , has allowed companies, workers and foreign students to have access to a single global platform for money transfer, bypassing excessively burdensome and bureaucratic banking practices and the Swiss Julien Arnolds, the creator of the ‘Numbrs mobile app that enhances the user experience of savers and consumers by giving them the ability to predict the future effect of operations.

In Italy, where a system generally more “plastered” than the dynamic Anglo-Saxon financial world reigns, the tools that are becoming more widespread and that are starting to be held in high esteem by those who are interested in investing their money and their savings in alternative and socially new, on the one hand are the Crowdfunding and on the other the Loan between Individuals, or Peer to Peer Lending, or Social Lending, which recently records interesting and promising trends for the near future. An investment method that derives from an idea that is actually quite simple, but inapplicable without the help of the web and new technologies: avoiding traditional channels and intermediaries, giving a “social” sense to their own money, feeling part of a community that is not by renouncing advantageous interest rates and sharing something with someone even in one’s own private or investment action. Therefore, a branch of the Sharing Economy, which in Italy is moving millions of euros (Smartika’s 2014 loan volume amounted to almost € 18 million) and is destined to expand and grow inexorably.

Because it’s easier, it’s smarter and allows people to make sense of their money.

Ethical loan, we really know it

What does ethical loan mean? In short, do not feed a high-risk circuit for many and high-gain for a few.

Then contracting the applicants with sustainable debts and protecting the money lenders.

Ethics is a beacon and a business model. To respond to the many requests from the forums, we can begin to say that lending money in an ethical way does not mean giving it to everyone or those who need it most, especially if it does not have a credit history that allows it to be evaluated or a past of a bad creditor.

This for reasons, in fact, “ethical”:

We all remember the subprime mortgage crisis, the one that has ignited the fuse of the economic crisis and the global recession from the US? The mechanism was this: creditors were granted loans on previous loans, thus turning it into a mountain of high-risk debt that was then “hidden” in complicated packages to be resold to banks with very large profit margins: Result? Bankruptcies, lost jobs, families without money and home. Lending money in an ethical manner therefore means transparency and avoiding such trap mechanisms. That’s how.

1) Ethics for therefore means not allowing people to get into too much debt, but above all to make consumption credit as it once was, when the mathematicians had not yet developed complex financial products. Each euro placed on the platform corresponds to a euro loan, without alternative steps.

3) Ethics also means protecting the creditor, who must be sure of his investment. It is he who chooses which interest to apply to the money he lends, but the task of the platform is to bring together supply and demand, choosing the closest and most appropriate interest to those who request the loan instead.

4) The ethical loan, we said at the beginning, can not aim to pump the profits of a few. In fact, does not earn at all on the interest charged on the loan, which is an exclusive of the lender. In , only one commission is responsible for the agreement between the parties. This fee is 1 percent charged to the lender and between 0.9 percent and 3 percent to the creditor, depending on his risk profile and the amount of his loan.

5) The profit of the lender is very often reinvested on the platform, going to feed more consumer credit and thus turning the economy.

The ethical management of is therefore concretized in an ethical purpose: money that circulates, consumption that grows, growth of a healthy and sustainable economy.

Revolving Card: if you know it, avoid it

Would you be willing to pay 16% interest on a loan of less than 10,000 euros?

This is what happens with the revolving card , a particular type of credit card that is used with increasing frequency because of its ease of use: ease, however, is paid at a very high price, since this financial instrument has numerous disadvantages.

But what exactly is the revolving card ?

It is a tool issued by a bank (or another credit institution), which allows the payment of purchases made with the card to be paid in installments , regardless of the availability of money in the bank account . The procedure is similar to that of traditional personal loans, because the owner of the card must pay interest on the installments.

At first glance, the revolving card could seem an easy and convenient solution, requiring less guarantees from the customer and therefore being more accessible It is not by chance that it is having success especially among young people.

Behind this facade, however, the revolving card hides more than one dark spot. Let’s see the main ones:

The percentages of interest that must be paid on the amounts financed are high, very high.

The Bank of Italy data for the April-June 2017 quarter reveal, for revolving cards, an average effective annual rate on an annual basis (APR) of 16.30% for loans of up to 10,000 euro, with a threshold rate of 24 , 3% (the rate over which the usury starts): impressive numbers, the highest of all the other types of financing. Instead, we remember that the average rate of personal loans is 10.3%, with a threshold rate of 16.9%.

The amount financed below the credit line must be maintained.

It is true that the revolving card works independently of the availability of money from the bank account, but the amounts must not exceed the maximum limit of exposure to the bank (credit), otherwise the client will find himself having to pay an additional cost equal to the maximum commission discovered .
The continuous availability of money often pushes customers to lose control of the situation and over-indebtedness, making it difficult to support the default interest (those that take over when an installment is skipped) and the overdraft fees.

The revolving card is far from providing subsidized and convenient financing: the mechanism that regulates this instrument risks crushing its user, with decidedly high interest rates.
By requesting a loan, on the other hand, you will be able to benefit from loans with the most advantageous interest rates. Discover immediately the models of ethical finance between individuals.

What is wear? Here’s how to recognize it

It can change scenery and main actors, but the plot is (almost) always the same. It is about usury , an evil rooted in society for many years. But the solutions for not being overwhelmed exist .

Wear is a very, very old phenomenon.

Suffice it to say that hints related to this practice are contained in some Indian texts dating back to 2000 BC: it has accompanied the history of man from its origins to the present day, but its physiognomy is still elusive and unclear.

Wear: definition

Usury is the offense that commits a person who grants a loan to a person asking for it to be returned at an illegitimate interest rate because it is higher than the so-called “threshold rate”.

The threshold rate is established every three months by the Bank of Italy and varies according to the type of loan and the amount class . We look at the usury rates of personal loans, finalized loans, revolving credits and fixed-rate mortgages for the October-December 2017 quarter, calculated for the entire distribution:

 

OPERATION CATEGORY RATE USURA
Personal credits more than 16.78%
Finalized credit more than 16.05%
Revolving credit more than 24.15%
Fixed rate mortgages more than 7.63%

If you want to know the threshold rates of all types of financing for the period from 1 October 2017 to 31 December 2017, please refer to this statement from the Bank of Italy .

The quarterly report of the Bank of Italy is a valid tool for understanding when the interests granted by an authorized institution (banks, financial institutions, private loan platforms) are to be considered usurious.

A constantly changing phenomenon

Once upon a time, those who turned to the usurers were mostly small businessmen in difficulty, gamblers and desperate people . With the economic crisis, the phenomenon has unfortunately also extended to the average Italian family : it often happens that financing contracts are entered into with financial companies for small amounts but with such high rates, which over time lead to a condition of over-indebtedness not more sustainable.

But how widespread is the wear and tear in Italy today? According to data provided by the Department of Public Security of the Ministry of the Interior, which analyzed all the complaints that were presented in 2016, while in the last year the wear and tear has certainly increased significantly, but the complaints remain a phenomenon unfortunately very limited (only 408 cases a year).

  The data, however, does not help to establish the real extent of the phenomenon: many victims of usury are reluctant to report, and this prevents us from defining with greater precision the impact of this economic and social scourge.

What is certain is that usury is spreading like wildfire throughout Italy: the southern regions and the islands continue to be the most exposed, but there has been a worrying increase in the phenomenon at the Center (with Parma at first place among the provinces most at risk) and also in the North, according to data collected and analyzed by Eurispes .

Protect yourself from wear? You can: here’s how

Here are some tips to protect yourself from wear:

When applying for a loan, contact only banks or authorized financial companies . The lists are available at the branches of the Bank of Italy.

1. When applying for a loan, only contact banks or authorized financial companies. The lists are available at the branches of the Bank of Italy.

2. Check the contract carefully, paying attention to the conditions of the loan, the contractual clauses and the applied interest rates. If you have doubts, contact a specialized association.

3. Remember that usury is a criminal offense punishable by imprisonment from two to ten years and a fine of € 5,000 to € 30,000; if the banks or financial corporations are to commit the crime, the penalty can be increased by a third to a half. Always report when you realize you have been wrongdoing: it’s the only way to protect yourself.

Personal loan between private individuals

Once upon a time the Bank. His job was to collect people’s savings, secure them and use them to give credit to those in need.

In this way, everyone could make money.

In the phase of stable economic growth (second half of the 80s and 90s), many citizens and businesses have benefited from it. But the financial system, meanwhile, evolved towards a proliferation of financial derivative products that increasingly alienated the financial world from the real economy: everything became increasingly complex and sophisticated. Thanks also to the short-term return target (many banks are listed on the stock exchange), the Bank forgot about its social function.

 

Yes, the role of the bank has changed compared to the past: now, banking institutions prefer to focus on safe forms of financing , which involve a low risk, for example by financing large companies to the detriment of small and medium-sized businesses (which often and willingly they must depend on the financing of the members).

 

A product favored by the bank, in recent years, is certainly the mortgage, which is required for substantial sums (up to 80% of the value of the property) and for long periods. As in any type of financing, the applicant must demonstrate that he has the income capacity to return capital and interest and, at the same time, provide a real guarantee. Here is the mortgage , which does not refer only to the sum loaned by the bank but to the entire value of the property: if the debtor were to become insolvent for a prolonged period of time, the bank may in fact also take possession of the house. A good guarantee, therefore, that makes the mortgage a particularly safe financial product for the lender : the slowness of changes in the value of the real estate market, together with that 20% of the value of the property that the bank has not lent to the applicant, they represent fairly solid guarantees for the bank.

 

Things are very different in the case of personal loans , where the amounts are quite low and the periods within which to repay the money are short. In this case, what are the guarantees for the banks in the event of a possible insolvency on the part of the debtor? The credit history and the paycheck , which today, unfortunately, no longer have the stability of the past. This entails a greater risk for the banks, and that is why the interest rates of personal loans are higher than those of mortgages. With reference to the data from the Quarterly Anti – usury Detection (October-December 2017) released by the Bank of Italy, fixed-rate mortgages have a Average Global Real Interest Rate (TEGM) of 2.91 (2.45 variable-rate ones), while the TEGM of personal loans is 10.23: this important difference is motivated precisely by the fact that, with personal loans, banks are involved much more than mortgages.

The new era of social lending

  Is it possible to obtain a personal loan with advantageous interest rates for the applicant? Yes, but we need to look for different interlocutors from banking institutions, which have maintained the social function of the bank of the past. Same purpose, but different methods and tools. These new interlocutors are the social lending platforms.

 

In the social lending (or peer-to-peer loan) the protagonists are three: the applicant , who requests the loan because he needs liquidity, the lender , a private entity that invests its savings by making them available to many different applicants, and an Internet platform through which the meeting between lender and applicant takes place. A digital solution, therefore. And it is thanks to technology that interest rates are lower than those offered by banks , because brokerage costs are lowered . But the benefits are not only for those who request the loan: even the private who provides their savings can get a good profit.

 

In order for this model of ethical finance to work, however, it is necessary for the borrower to respect his commitments and return the sum loaned according to the agreed modalities : only in this way can both parties be protected. Social lending does not mean social credit. It is precisely for this reason that, to establish the reliability of an applicant and decide whether to grant him a loan, P2P platforms still refer to his creditworthiness, which is also functional in setting interest rates, which must guarantee a minimum return cost-effective for lenders after any insolvency. In some cases, “owl” rates are initially proposed, ie very low, because it is possible that at a later stage other products are offered with much higher rates ( revolving cards , for example).

 

Social lending has succeeded in restoring the social role that once belonged to the banks , giving the opportunity to those who need small amounts to request a loan peacefully and have immediate liquidity. It is a new model of ethical finance, it is a new idea of ​​progress. You also take part in the change: apply online to apply for a Smartika loan and find out if you are eligible.

Invest in Social lending

Use technology to share information, goods, resources: it’s the sharing economy.

One of the many variations of this “sharing economy” is P2P Lending (or Social Lending)

An alternative finance model in which, thanks to technology, individuals make their savings available to those who request a loan, without bank intermediation .
P2P Lending is very widespread all over the world: just think that in 2016, only in the US, 24 billion dollars were provided through online platforms.

However, in Italy, the affirmation of this model of ethical finance is lagging behind other countries.
Why? The reasons for this are more than one. The main one concerned the type of taxation, not very beneficial for lenders. But now things have changed profoundly: 2018 will be the year of the breakthrough of P2P Lending in Italy.
In fact, in December 2017, the Italian Parliament finally approved an amendment according to which P2P Lending is no longer taxed on the basis of the income tax rate relative to the investor, but with a single rate of 26% , as for any other form of investment financial.

Parliament has also recognized, from a legislative point of view, that P2P Lending is an important part of the Fintech sector, where finance and technology meet. Behind the promulgation of the amendment must read the desire to bring Italy to the same level as its European neighbors. Because P2P is a model that works, and that can help to grow the economy.
P2P Lending is a form of high yield investment, and has low volatility. Make a loan to a private individual, and each month receive a repayment consisting of an interest and a principal amount. Everything is clear and linear, without the fluctuating trend of other financial instruments.

However, as with any other form of investment, Social Lending also has some risk factors. But with Social Lending, a P2P Lending platform monitored by the Bank of Italy , these factors are drastically reduced. Here because:

You choose how much to risk.

With Social Lending it is the lender who decides how much he wants to risk. You can invest on 3 different markets: Conservatives, which includes applicants whose loans are very solid, Balanced, and finally Dynamic, where the borrowers that are more risky are grouped together, but which allow for greater remuneration. You establish the most suitable market for you.

Diversify to reduce risk .

If you decide to invest € 1,000, your money will not go into the hands of a single applicant, but will be divided into small parts, for example € 20. You will then lend your € 1,000 to 50 different applicants.

Credit recovery in the event of non-payment .

If the applicant does not have to repay the loan on time – and if there is no agreement – Social Lending proceeds to recover the amounts due. The lender will be able to recover what has been lent, following the legal process.

“Social Lending Lender Protection” protection fund .

In the event that the legal process is not successful, Social Lending will activate, up to the fund capacity, the Social Lending Lender Protection, a protection fund to repay the unpaid capital by the debtor: an important guarantee to protect lenders.

But investing with Social Lending agrees? The answer is yes: investments make up to 6.5%, much more than those of many other financial instruments.

If you are looking for a form of intelligent investment, supportive and with excellent returns, Social Lending is the best solution. A model of alternative finance, made by people and for people, that looks to the future. Invest now.

Differences between loans

They may seem “all the same”: similar mechanisms, similar procedures, the same purposes. In reality, they are different from each other.

And the differences are neither few nor insignificant. We are talking about loans.

There are many types of loans, each of them with specific characteristics.

The first, substantial element of diversity between the various types concerns the interest rate., that is to say the cost of borrowed money (in even poorer words, the return that the borrower lends): which may be higher or lower depending on the financial or paying bank (attention then to the hidden and written clauses in small contracts!)

To get a clearer idea of ​​these differences, just compare the values ​​measured by the Bank of Italy , which publishes a document every three months that collects the actual average global rates of the main loan categories. Taking a look at this document, we find that one of the loan categories with the lowest average APR (2.45%) is the mortgage. Why is the value so low when compared to other forms of loans? Because mortgages are considered low risk loans , since the security required is solid (the house itself for which you are paying the loan which, in the case of insolvency of the debtor, may become the property of the bank). Not to mention the fact that, especially in Italy, anyone who requires a mortgage is investing with a great emotional load, and will do everything to honor the commitment made by paying the installments on time, so as to avoid losing the property.

The level of risk is, in fact, the most important variable in determining the interest rate of a loan . If the bank (or the lending institution) believes that a particular type of loan is secure – because the debtor provides solid and real guarantees of repaying the debt – and therefore the level of risk is low, it is accordingly also the interest rate. On the contrary, if a loan is not protected by strong guarantees, the level of risk rises, and the interest rate will be higher.

But what is the average APR of the loan categories indicated in the Bank of Italy document? Let’s take three of them, the most widespread ones:

  • Loan finalized: the average APR is 9.64% ;,
  • Personal loan: the average APR is 10.2%
  • Revolving cards: the average APR is 16.15%

We analyze the characteristics of these loans and try to understand together the reasons for their values.

Finalized loan

A finalized loan is a form of financing strictly linked to the purchase of an asset , such as a television, a washing machine, a car. In this type of financing, the money is not credited to the customer but to the company that sells the product / service for which the loan is requested.

If, for example, you want to buy a car , but you do not want to pay it all at once, you can ask the dealer for a loan with payment in installments . In principle, it will not be you who decides which funding agency you want to refer to: car manufacturers usually rely on a specific financial institution and, when a client requests a loan, they themselves provide the loan application to the credit institute reference. The funding body will evaluate the application and decide if there are conditions to grant the loan. In the event of a positive response, the sum will be paid directly to the concessionaire : in fact, it is as if it were advancing money on behalf of the client, who will then have to repay the loan (of course, with any interest) directly to the bank through monthly installments, often with direct withdrawals from the current account.

In addition, in the case of targeted loans, it is possible that you will be offered a zero rate loan : in this case, the borrower does not have to pay interest to the institution that provides the loan. Zero-interest loans are possible thanks to agreements between stores and financing companies: for example, the retailer undertakes to offer a customer who wishes to purchase a home appliance a zero-interest loan instead of a discount on the product.

Personal loan

Unlike the finalized loan, a personal loan is not tied to the purchase of a specific asset: this means that the requested sum is credited by the lender body directly to the loan applicant, often directly to his checking account. An example of a personal loan is that which may be required, for example, for the renovation of the house.

This form of financing, which is growing strongly in Italy, presents slightly greater risks than the loan because it is impossible to control the actual purpose of the loan.

And this is precisely one of the reasons for which the average rate is 10.2%: a value slightly higher than that of loans aimed at (9.64%) , but still very similar.

Revolving cards

 A different argument must be made for the revolving card , an instrument issued by a bank, or another credit institution, which allows payments in installments – with related interest – of purchases made with the card itself, regardless of the availability of money present on the bank account.

It is a very accessible financial instrument, which requires little guarantees from the client. Moreover, the continuous availability of money means that customers use the revolving card without having the actual perception of what they are spending. The result? The maximum limit of exposure to the bank is exceeded and the maximum overdraft fees must be paid. Very high risk and, consequently, interest rates to the stars: Banca Italia reports that the average APEG of revolving cards is a good 16.15%.

This is why the main types of loans have different interest rates. But always remember the most important thing: never request a loan if you’re not sure you can pay the installments on time . Maybe at the beginning you will not have problems but sooner or later the nodes will come to the comb and you will be subjected to negative reports in databases and also heavy cost increases. Contracting only sustainable debts is the only way to sleep peacefully.