Is a loan a yoke or a helping hand?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Raise your hand, who has never borrowed money from friends or the bank? Who has never bought things on credit, from a cell phone to an apartment? Who doesn't have a credit card just in case? Raised hands are few - one in a thousand. This suggests that loans and loans are the most popular and sought-after financial product among the population of our country.

Let's understand what a loan is. I propose not to go into legal subtleties, but to consider this phenomenon in the broadest sense. A loan is a loan of money or other things. It can be issued to a legal entity, that is, a company, and an individual. Engaged in the provision of financial services of this kind are mainly banks and other organizations that have the right to do so.

A loan to an individual can be in the form of a sum of money that can be spent

at will, and have a very specific purpose, for example, to buy household appliances, cars, houses. In this case, the client of the bank will not see the money, since they will immediately go to the account of the seller's organization. Instead, the borrower receives the borrowedfunds item and pays its value to the bank.

A loan is money lent by a bank on the terms of repayment within a certain period of time and a fee for use. What does this mean? A loan is the need to repay the entire amount, pay interest for its use, and pay both the principal debt and the fee for its use within the period specified by the bank. If for some reason the borrower has violated these conditions, then fines and pen alties for violation of the terms of the contract are added to his fee for using the borrowed amount.

A loan is a financial instrument, with the skillful use of which you can solve your financial problems. Skillful use involves an adequate assessment of your financial situation before and after borrowing money. To do this, you need to calculate all your income, subtract from them the monthly mandatory expenses (food, utility bills) and assess whether the balance is enough to pay the monthly loan payments. The point is that the loan does not turn out to be a misplaced card that breaks the whole house of cards. No more than 45% of the family budget should go to pay off the loan.

Since our country has created all the conditions for competition between banks and their

fight for a client, you should not run for a loan at the first bank you come across. It is recommended to spend at least a couple of hours studying the offers of banking institutions, their requirements for the borrower and methods of paying the loan. Even within the product line of one bank, there are sure to be loans with differentparameters. It often happens that the offer of one bank on the basis of only a passport will be more attractive than the offer of a competitor bank on the basis of a full package of documents. If you are an active user of debit and credit bank cards, there is a chance that you will be provided with a loan on more favorable terms than for other bank customers. When exploring repayment channels, it is important to pay attention to the possibility of depositing funds for free. In many banks, paradoxically, there is a commission for repaying a loan through the bank's cash desk.