By Dennise Williams, Staff ReporterWITH THE exception of credit cards, salaried Jamaicans in need of a loan have generally been required to present collateral of some type.
Now two financial institutions are specifically offering non-collateralised loans, and borrowers are showing their appreciation.
As reported in Wednesday Business on September 17th, PayRoll Plus from National Commercial Bank has already disbursed loans to over 100 persons in just two weeks from its introduction.
This NCB package is restricted to persons earning at least $30,000 per month with loans up to 11 times your salary with a maximum of five years to repay. And while the effective interest rate is 32 per cent, there is no collateral required and no restrictions on the purpose of the loan.
However, there are fees and certain requirements that accompany the loan.
Two of the requirements of PayRoll Plus are that your salary must be sent to NCB from your employer and savings of 0.25 per cent of the loan amount must be kept in a separate account. In a similar vein, Capital Solutions Ltd. offers salary advances to employed individuals who just need a few dollars to carry them over to the next pay day.
PayDay Advance is a non-collateralised package on a much smaller scale than NCB's offering.
The maximum amount that you can borrow is J$30,000.
According to general manager of PayDay Advance Ltd, Tanya Khouri, "this is a loan to tide people over until their next payday. We opened our doors to the general public on Monday, August 18, 2003, and have had roughly 300 applicants."
PAYDAY FEES
Wednesday Business was informed that while PayDay Advance does not charge interest, they do have fees that are tiered and are based on the amount of the advance.
"There is a $400 application fee and for every $5,000 borrowed there is a $600 flat fee," Khouri states. All fees include General Consumption Tax.
"The application process takes about 30 minutes and once it has been approved, the employee receives the funds within three hours," Khouri said. "Funds are then repaid to us on the employee's next payday. Repayment can take the form of salary assignment, cash, electronic funds transfer or cheque."
And for persons who take issue with the fees in lieu of set interest or even the interest rate that NCB charges, Khouri has the answer.
"This type of service is not typical of most commercial banks," Khouri said. "This type of service is high risk and unsecured."
Our NCB source states, "we are the only bank offering an unsecured loan of this amount. There is no other loan like this anywhere else, plus the convenience and benefits that come along with loan more than make up for the interest charged."
