2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
When lending, many people have a question: "Where can I find a loan with a low interest rate?" After all, no one wants to pay. When choosing a bank, as well as a loan program, you should pay attention to some nuances.
The interest rate by itself does not provide comprehensive information about the total cost of the loan, since the advertisement most likely does not include all commissions, insurance and other payments.
Cash loan, to a bank payment card, goods on credit - a dilemma for the borrower. Interest depends on the choice of the loan program. The most expensive type of loan is a cash loan. The low interest rate in this case will be balanced by additional commissions. Another thing is goods on credit. This is the cheapest type of consumer lending, because in this case the bank takes the goods as collateral. A loan on a bank card is also a rather interesting product. In most cases, the bank makes it possible to use credit funds on preferential terms for a certain period (30-50 days). This is an opportunity to save on interest.
If you need a significant amount of money for consumer needs, sometimes it is easier to use a product such as a consumer loan secured by property. In this case, the lowest interest rate will be. The loan is issued mainly for a long time, which will significantly reduce the burden on the borrower.
Let's take a look at common pitfalls for borrowers.
Hidden fees in the form of loan insurance
Such insurance is more of a sale of additional banking products than a necessity. After all, basically, the borrower is insured against an accident, and not against non-repayment of funds.
Monthly loan management fee
Even if the interest rate is attractive enough - do not rush. Check with the manager about commissions. As a rule, banks, offering a loan with a low interest rate, provide the profitability of the organization through a monthly commission. The size of such a commission ranges from one to two and a half percent of the original loan amount and is paid monthly.
Commission when issuing a loan
As a rule, this kind of commission is used only when issuing a cash loan. The cost of the commission depends on the terms of the loan and is measured as a percentage of the amount of the loan. You can also meet a commission for withdrawing credit money through a bank cash desk or ATM.
Early repayment fee
Sometimes can be found in bankloan products a commission for early repayment of the loan. This increases its cost for the borrower, and in this case, a loan with a low interest rate is much more expensive than a similar one in another bank with a higher interest rate.
Thus, we focused on those points that significantly affect the decision when obtaining a consumer loan. This makes it possible to calculate all the costs, pros and cons of applying for a loan under a particular program and really get a loan with a low interest rate, and not a huge baggage of overpayments.
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