Loans In Italy
Do you require loans in Italy? Are you interested in learning what a loan is and what to think about before applying for one? Then you should read this article. You can learn everything about loans and borrowing money in Italy here.
In the following article, you will find options for taking loans in Italy. You will also find all the information about loans in Italy so that you can decide for yourself which option is best for you.
In this text, we do not give you financial advice and everything you decide will be your decision.
When it comes to finances, you have to be extra careful, because the decisions you make can affect your life for a long time.
So be well-informed and do your complete research before making any decision.
For over 20 years, PrestitiOnline.it has been the only loan comparator that allows you to compare the products of the main banks and financial companies operating in Italy to find the most convenient online loans for you in a clear, fast, and transparent way.
With PrestitiOnline.it the group responds to the needs of those looking for a loan online because on the site it is possible to compare personal loans and debt consolidation, as well as find many offers for loans and salary and pension-backed loans.
- Free application
- No commitments
- A specialist dedicated to you, free and without obligation
- Repayment terms of up to 10 years
- Amounts up to €60,000
- TAN starting from 5.99%, APR starting from 6.20%
The BPER Banca Group was founded in 1992 on the initiative of BPER Banca. The basic objective is to create a reality in which each Bank can exploit the synergies of a large Group while maintaining operational autonomy and local roots.
You could apply for a loan for home renovation or for renovating furniture and appliances; a loan for the car or to attend a master’s degree; a loan for debt consolidation or to meet unexpected expenses. For this, there are the personal loans disbursed by Bibanca and distributed by BPER Banca.
Financing amounts from €1,000 to €75,000.
Spend the amount however you like. Travel, motorbike, car, study, furniture, housework.
- Duration from 12 months to 120 months.
- Mini loan: mini installments starting from €30 per month
- Fast Loan: you can skip an installment or change the amount
- Maxi Loan: up to € 75,000
Loans in Italy: Good to know
A loan is a type of credit vehicle in which a sum of money is given out to another party to be repaid sometime in the future. In most cases, this amount is usually paid with interest or finance charges which the borrower must pay in addition to the principal value.
Loans in general come in different forms. They include secured unsecured, personal, and commercial loans. Also, loans may be specific, one-time amounts or available as an open-ended line of credit up to a specific amount.
But why do we take up loans? Today, most people take loans due to different reasons. While some are based on personal reasons, others are entirely based on commercial or business factors.
In the next few sections, we will be answering questions on how, why, what, and which loans are available for you in Italy.
Consumer Credit In Italy
Loans in Italy are also known as Consumer credit. They are money lent out for the purchase of goods and services required by a consumer or the consumer’s family. They include but are not limited to a home, a car, tuition fees, etc.
A loan may range from €200 to €75,000. They are usually granted by authorized financial companies or banks. They also help in providing goods and services, such as car dealers or retailers.
Consumer loans in Italy are often requested for personal needs. For instance, a loan gotten to buy a car, or home or pay tuition fees is known as a linked credit agreement or special purpose loan. The lender is expected to pay the sum directly to the seller.
However, if a loan is demanded due to cash reasons, then such loans are known as non-specific loans in Italy.
Who Can You Ask For A Loan In Italy?
Loans in Italy can be requested through Banks or Authorized Financial Companies. Lenders are expected to make use of credit brokers and agents who act as credit intermediaries.
While agents act on behalf of their lenders to conclude loan contracts. Credit brokers can only promote loans and cannot conclude loan contacts. They both request a fee, which is usually decided upon before the job.
Also, you should check whether a Credit broker is entered into the OAM lists. The OAM lists are known to contain verifiable information on correct business practices. However, a financial company or bank can act as a Credit broker because it proposes loans for other companies.
Who Can Ask For A Loan In Italy
Anyone can ask for a loan in Italy. But you have to prove that you can pay back the money you borrowed before the set deadline. This is known as Creditworthiness and is usually assessed by the lender before the loan is given out.
How Is Creditworthiness Assessed In Italy?
Before contracts are finalized or agreed upon, the lender usually collects information on the consumer’s ability to pay back the loan based on set deadlines. This information is usually gathered by consulting the customer database.
In Italy, there are public and private databases where information about refused loans and non-payments of installments can be obtained by individuals. So you need to maintain positive creditworthiness to get loans from the bank and other financially authorized companies.
What loans do we have in Italy?
There are different types of consumer credits or loans in Italy. They include:
- Personal loan
- Opening a current account credit facility
- Revolving credit card
- Special purpose loan or linked credit agreement.
Personal Loan In Italy
Personal loans in Italy are given out for general cash needs. The lender (banks or authoritative financial companies) pays an amount of money to the customer, who pays back instrumentally.
To protect itself from the risk of non-repayment, the sender might ask for an insurance policy or personal guarantees, i.e. Surety.
Opening A Current Credit Facility
This type of loan occurs when a bank agrees to deposit a fixed amount of money in a client’s current account. But in other, to access the money, the client is expected to pay a fee to the issuing bank.
Also, the client is expected to pay back parts or all the amount used with interest as indicated in the contract. Only then will the amount become available for use again.
Loan With A Revolving Credit Card
In Italy, consumers with a revolving credit card not only receive a loan but also has a payment instrument. As a cardholder, you can make use of your card to withdraw cash or make direct purchases at retailers.
This type of loan can be repaid in installments with a usually variable interest rate. Also, the card can be used up to a maximum level as set by the lender. However, only when this amount has been repaid can the amount be spent again. That’s why it’s known as a revolving credit card.
Special Purpose Loan
Linked credit cards or Special purpose loans are loans gotten for the purchase of a specific good or service, which are to be paid back in installments.
Consumers in Italy can get this type of loan from sellers who act on behalf of one or more banks or financial companies. They are also involved in the management of this loan on their behalf.
In addition, this type of contract must include a detailed description of the goods or services and the inclusion of their costs.
What Documents Do You Need To Get A Loan In Italy?
Both Banks and Financial authoritative companies in Italy need certain documents and paperwork to set up loans for customers.
Below are some of the requirements you must meet for your loan to be considered:
- A form of identification
- Tax code
- Employee pay packet and CUD (employee tax payments).
- Pensioner (your pension pay slip or National social security certification).
- Documentation of any ongoing loans.
Non-Italians who are living in Italy must provide documentation to prove that they are legally residing in Italy.
Online Loan In Italy
Online loans are the faster way to get a loan in Italy. They require less paperwork and documents to get your loan approved in minutes. Also, the online world has made it possible to get anything online.
For instance, you can conclude the transfer of properties, buy a new car, pay tuition fees and start a new business all from the comfort of your home. Also, Online loan allows you to complete your loan application from home without going to the bank.
You can easily manage your account and upload any required documents without seeing the four walls of a bank. Furthermore, the approval time is faster compared to the time you have to wait if you visit the bank.
But before you start filling out any online loan application, make sure the company offers the type of financial products you need. Below are some types of financial loans you might want to consider
Private Loan In Italy
Private loan in Italy is a new smart way of financing Italian borrowers who are not happy with the banks of Italy. These loans are usually financed by private investors to individuals and entrepreneurs who are facing financial emergencies.
In addition, private loans are usually regulated and are granted through peer-to-peer lending platforms or Italian private lenders.
Although, there is a flip side to using this type of loan. For instance, there are reports of numerous scams and frauds where lenders obtain upfront fees from borrowers who in the end won’t see any loan.
Car Loan In Italy
Car or Auto loans are funded by an individual lender to help another individual who is known as the borrower to help in the purchase of a car.
Car loans in Italy are made available to an individual with little to no financial funds to buy a car. This type of loan is usually given based on the credit score and creditworthiness of the individual.
Furthermore, in Italy, the lender will first assess the real value of the car before approving the buyer. Car loans in Italy can either be facilitated by the company issuing the car or the financing company.
Home Loan In Italy
A Home or mortgage loan is a medium to a long-term loan, usually between 5 and 30 years. The borrower is offered the amount in a lump sum and is expected to pay it back in fixed or variable installments.
A mortgage or home loan in Italy can only be used to buy, build or renovate a building. Mortgage loans are usually secured based on the property acquired. So that in case of default payment, the house can be claimed as collateral.
However, some home loans in Italy such as Real Estate often require an equity injunction which can be between 10% and 30%. This is usually decided by the contracts entered into by both parties.
Furthermore, to acquire mortgage loans in Italy, you need to have solid documentation to avoid conflicts in case of a payment default. Also, this will act as a security for your acquired property.
Students Loan In Italy
Student loans in Italy are funding facilities granted by Banks or Authorized financial companies to individuals; in other, to pay their child or kid’s tuition fees.
This type of loan is aimed at assisting parents from varying backgrounds who cannot pay the tuition fees of their children.
Also, students loan need to be planned ahead of time because most tuition fees are usually paid on yearly basis, thus disrupting heavily many families’ budgets.
Short-term Loans In Italy
Short-term loans as the term implies are loans you’re expected to repay within 6 to 8 months. This type of loan is usually taken by the borrower to settle financial problems and expenses.
Online loans in Italy often offer short-term loans which can you can get in a very short time. They are quicker and faster compared to traditional banks.
However, your credit history is an important component that lending companies and banks watch out for in other to gain insights into your credit history and affordability.
Short-term loans are ideal to solve minor problems in Italy. Whether it’s to get a new car, a new home, or pay off your child’s tuition fees; this is the type of loan you should consider.
But if you intend to buy large machinery and huge factory equipment, then a long-term loan is your best option. They are usually granted for years with a repayment plan based on the contracts signed by both parties.
Reasons Why You Need A Loan In Italy
Emergency Cash Assistance
If you need money to cover bills and emergency costs, then you need to take out a private loan. Most online lenders provide an online application system that you can complete within minutes.
This loan can be received within a day or a few business days; depending on the bank or financial lending company. You can also use your loan to cover expenses such as medical bills, funeral expenses, etc.
Italians can make use of private loans for debt consolidation. It is a popular reason why most Italians take out loans from banks or authorized financial institutions.
However, unlike credit cards, loans in Italy charge around 4%. You can just take out a private loan to pay off your outstanding credit card and then make a payment back to your lender.
Home improvements and repair
If you reside in Italy, you can take out a home equity loan to buy, fix or upgrade a home. Home loans in Italy are great for tackling your home projects.
This type of loan is known as a secured loan because they require collateral. However, if you risk losing your home due to fallback payment, then a private loan is advisable.
If you intend to move out to another state or country, you may need extra cash to pay for moving costs. Moving to a faraway distance might come with a cost. Such costs include packing your belongings, hiring movers, and transporting your things.
Home loans in Italy can help fund the process of finding a new place to live. For instance, in Italy, you are expected to fund the costs of the first month, the last month, and a security deposit.
While we don’t recommend borrowing money to finance your wedding, it’s advisable you par down your wants to fit your budget.
But if you’ve no choice and need to borrow, then you should go for a credit card or private loan.
Also, while credit cards have higher interest rates than private loans; a private loan will help you save a lot of money.
For instance, if you intend to buy a machine or equipment such as a dishwasher, washing machine, dryer, or refrigerator, a loan can provide relief.
Also, a loan can help cover those steep repairs and electronics you need for your business or household.
However, this type of purchase usually comes with high upfront fees. You can save time and money when you make use of a personal loan.
Car loans in Italy are available I’d, you’re looking to lease or buy a car. Car loans tend to have lower interest rates compared to when you buy them in cash. However, if you’re scared about getting your car repossessed due to missing payments, a Car loan in Italy might be right for you.
When Not To Use A Loan In Italy
While loans can be a useful tool to finance expenses, there are some situations they may not be the best option for you. Below are some of the cases you need to watch out for.
- Your credit score is very low:
In Italy, the lower your credit score the higher your interest will be. If you’ve got a bad credit score you might want to consider improving them to increase your chances of getting your loan approved.
- You can’t afford the monthly loan payments.
Before you take that loan, you need to assess your spending plan. If you are on a tight monthly budget, then a loan might do you more harm than good.
- You qualify for other financing options
For instance, if you need a car, an Auto or Car loan in Italy will be the best option for you rather than a personal loan. Also, if you need a home, a mortgage or home loan in Italy is your best option.
You need to consider why you are applying for a loan and see which loan is designed specifically for that purpose.
- The expenses aren’t necessary
While getting a loan in Italy is a personal thing, taking a loan for something that isn’t necessary can put you at financial risk.
Best Banks For Taking Loans In Italy
Monte bank has a very long history in Italy. The bank was established in 1624 and is considered the second-oldest bank in the world. Currently, it’s considered one of the top banks in Italy within the banking and commercial sector.
Monte dei Paschi di Siena offers a range of banking services which include online banking, assets management, ATMs, etc. At the very top of it, services are lending facilities. Which gives Italians the opportunity to borrow money for some time.
Banca Nazionale del Lavoro was officially opened in 1913 under a different name before it was taken over by the Italian government. But after some years the bank was purchased by a private business in 1988.
Some of the banking services offered by Banca Nazionale del Lavoro include current accounts, savings accounts, insurance, credit and debit cards, loans, cash management, etc. Their lending facility is known to be favorable compared to other Banks in Italy.
Crédit Agricole Italia is a popular bank in Italy that offers loans and financial services. At inception, it was first called Crédit Agricole Cariparma with over 800 branches in the country.
Some of the banking services offered by the bank include deposit, assets management, insurance, loans, etc. As of 2016, its total assets exceeded €160m.
According to the Central Bank of Italy, Unicredit S.p.A. is one of the biggest Italian banks in terms of loans, deposits, and assets the bank manages.
Also, Unicredit S.p.A. boasts over 25 million clients as well as 4500 branches of which over 2000 are located in Italy. Also, at the end of 2020, the bank capital was put at $31b.
Simple terms you must know before taking a loan in Italy
- TAN (in Italian Tasso annuo norminale):
TAN or Annual Nominal Interest Rate is used to identify pure interest rate as a percentage of the loan given on an annual basis.
“Pure” in this case means that it doesn’t include any fees and doesn’t identify the ‘total cost of financing which is expressed in the Annual Percentage Rate of Charge (APR).
- APR – (in Italian Tasso annuo effettivo globale)
The Annual Percentage Rate (APR) is expressed as a percentage of the loan given on an annual basis and includes all the costs.
Furthermore, the APR is used on consumer loan contracts as an instrument of transparency. They are also used as a transparency index on customers’ loans.
Also, APR makes it possible to compare all loans quickly and easily around Europe, including those offered by foreign operators on the Italian market.
- The AOER and usury
In Italy, the Average Overall Effective Rate (AOER) uses a reference rate in calculating the usury ceiling.
Overall Effective Rates (OER) are usually applied by lenders to all borrower types of loan i.e personal loans, opening a current account credit facility, etc.