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Are Cooperative Loans Better Than Bank Loans?

You may be familiar with cooperative loan services or maybe even have applied for cooperative loans for various purposes. Before the proliferation of online Payday Loans service providers and bank loans, loan services from cooperatives had long been available.

For information, a cooperative is a legal entity owned and operated by its members to meet mutual needs in the economic field.

One type of cooperative that is quite popular is the savings and loan cooperative. This cooperative provides money loans to its members based on mutual agreements and agreements. Compared to bank loans, the requirements for applying for cooperative loans are somewhat easier.

The average cooperative loan ceiling is not inferior to credit without collateral, which starts from $ 500 to 1 millions. In fact, there are savings and loan cooperatives that do not provide a loan ceiling limit or are adjusted to the value of the guarantee.

So, it’s no wonder that cooperative loan services are still the mainstay of many people. Not a few small and medium enterprises (SMEs) rely on cooperative loans as a source of additional capital.

Well, for those of you who are looking for additional capital and are interested in applying for a cooperative loan, let’s get to know the ins and outs of cooperative loans from the reviews below.

Terms of applying for a loan

To be able to apply for a capital Payday Loans from a cooperative, here are some general requirements that must be met:

  1. Has status as a member or prospective member of a cooperative
  2. Fill out the loan application form
  3. Submit a photocopy of husband or wife’s identity card (if already married)
  4. Submit photocopies of family cards, electricity bills and salary slips
  5. Submit a photocopy of the guarantee document

Loan application mechanism

According to the requirements above, you must first become a cooperative member to be able to enjoy the loan services. To register as a member, you can contact the marketing department of the selected savings and loan cooperative or come directly to the office.

Next, you will be asked to complete a loan application form, as well as submit a detailed funding proposal. For example, loan proposals for motorbike washing business capital, food stalls, and so on.

The cooperative management will consider applying for a loan based on the proposal submitted. If, the loan proposal and application are in accordance with the applicable provisions, loan funds for your business capital can be obtained immediately.

Matters regarding the loan tenor, interest, and the amount of loan funds approved will be explained through a cooperative loan agreement.

As we know, today there are various loan service providers that can be applied for additional business capital. Starting from online fintech loans (financial technology) to bank loans, both multipurpose loans and unsecured loans .

Each loan service has its own advantages and disadvantages, as well as savings and loan cooperatives. As a consideration before applying for a cooperative loan for business capital, here are the advantages and disadvantages of cooperative loans that need to be known.

The advantages of cooperative loans

1. The cooperative loan mechanism is easy

Compared to the requirements for applying for a bank loan, the requirements for applying for a cooperative loan are somewhat easier. In addition, the loan mechanism is also simpler.

Prospective debtors only need to prepare personal data and business proposals. The process of applying for cooperative loans is also quite fast, which takes three to seven working days.

2. Low interest rates

When compared to online fintech (financial technology) loan services, cooperative loan interest rates are considered lighter. In comparison, the cooperative loan interest ranges from 0.3-2.5 percent per month. Meanwhile, the average online fintech loan interest ranges from 0.5-3 percent per day.

That way, cooperative loan interest rates can compete with bank loan rates, which range from 0.59-2 percent per month.