What is the easiest way to get a loan?
- Emergency loans.
- Payday loans.
- Bad-credit or no-credit-check loans.
- Local banks and credit unions.
- Local charities and nonprofits.
- Payment plans.
- Paycheck advances.
- Loan or hardship distribution from your 401(k) plan.
Now, let’s take a look at a Chinese consumer lender. With all the talk about Upstart loans recently, we thought looking at a ‘Chinese Upstart’ would be interesting.
To begin with, easy accessibility is one of the most attractive traits for customers. Whether, Chinese or American customers.
The Jinding Sheng company is a microcredit lending company in this field which only faces personal clients and family clients. Therefore, unlike other larger loaning companies that mainly focus on entrepreneurs and enterprises, the prerequisites and thresholds for loaning money are relatively low.
Theoretically, every citizen, if they could prove that they have the ability to pay back the loan. As a result, the company would sign contracts with them and give them the money.
Moreover, the convenience and the efficiency are also dominant factors that cause clients to choose this company. Usually, for a larger macro-credit loaning company to audit and approve one’s loaning request, and wait for the company to send money into the bank account, it would take several months or even a year to complete. However, for micro credit companies, it would take much shorter time and easier to complete. The only requirements are to show the banking statements, fill out a personal profile, for instance, proof of employment, property ownership certificate, etc., and then go to the notary office to prove that the loaning contract has the legal effect.
The whole process will only take within a week.
Which means if the clients have any urgent needs, the company would be their best choice and solve their problems if they need the money immediately. What if the customer does not have a high paying job or does not have enough money in the bank to pay back? The company allows them to use real estate or any other owning properties as guaranties for paying back. Thus, when someone is cornered with no cash to operate, the company’s loan using their properties as guaranties will be the last choice. It is also an opportunity for them to make a comeback by using the loaning money.
Admittedly, the advantages are obvious and beneficial for clients, but there are still several drawbacks.
Micro-credit loaning companies find it difficult to collect the debt. The size of the company contains only 10-20 people in operation, when the debtor cannot pay back the money, it will drag in a large amount of human and time resources to collect it back. As a result, the only way is to go through the court and civil proceedings.
The lawsuit will usually take months to get the money refunded. Since the company is relatively small, the cash pool may run out of capital if the money cannot be collected in a short period of time. Consequently, it will affect the normal operating of the company, and even prevent company from developing new customers since the capital is not enough for loaning more.