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Banks are very carefully studying the goals for which you are going to raise a loan, since it depends on what interest you pay and what documents will be required of you when applying for it. Consider the most common types of loans that you may encounter in the future: consumer, car loans, mortgages, as well as loans provided to a credit card holder.
The main characteristics of these types of loans are shown in the table (see table 3 on page 60). Consumer credit is one of the most common types of lending provided by the bank. It is usually given for the purchase of household appliances, electronics or furniture. Most often, you do not need any documents other than a passport. After several questions that will be included in the application form, you may be asked to take a picture with a camera. To check the cell number you can call the operator and clarify some of the nuances of the loan application. the application will be considered very quickly, and after a short time, if the bank has made a positive decision, you will be asked to sign a loan agreement. However, not all so simple. The facilitated procedure for obtaining a loan entails an increased interest rate, because in 15 minutes the bank will not have the opportunity to check you with all the necessary thoroughness, and, therefore, the risk of non-repayment of the loan for it increases.
Car loans are more targeted than consumer. The purpose of the provision of funds is immediately determined - it is buying a car, and you won’t be able to spend money on other purposes, since at the same time you sign a loan agreement, you sign a payment order for transferring credit funds from your current account to the current account of the car seller. just as when applying for a consumer loan, the loan manager will offer you to fill out a loan application, after which it will be sent to the bank and will be considered within 1-3 days. In case of a positive decision of the bank, you will have to make an initial payment - up to 10% of the cost of the car. The car loan rate is slightly lower than the cost of a consumer loan, but it is still quite high and can reach 20% per annum. When contacting a loan manager, be sure to find out if there are preferential car loans in his bank, and contact the loan managers of other banks with a similar question, since saving on the interest rate can be very profitable. When buying a car on credit, you will have to incur additional costs, in particular, to issue a hull.
Mortgage loan is perhaps one of the most difficult in obtaining loans. The bank is very risky when it issues a large amount of money in debt for several years, so the check of the borrower will be as complete as possible. In addition to checking, the bank attracts the purchased apartment as collateral, and may also ask for guarantors who will be responsible for your debts if the cost of the apartment and your income in the future are not enough to repay the entire cost of the loan. Before submitting a loan application to a bank, be sure to compare the offers of various banks for this type of lending.
Among the key parameters of the comparison, you need to find out:
a) the loan term (you have to pay the loan for several years, and therefore you need to choose a loan period in which the amount of monthly payments will not be too heavy a burden on your budget);
b) the loan amount (the larger the loan amount, the greater the amount of monthly payments and interest that you will have to pay);
c) the time period for considering the application and the period during which the decision is valid (you must understand that the decision on a mortgage loan is a matter of several days, and therefore the situation when you find an apartment and hope on the same day getting a loan to buy it is impossible. It should also be remembered that the approved application for a mortgage loan is valid for a certain time, usually up to 1 month.);
d) additional costs for the loan (this may include various types of insurance, commissions, etc.). The stages of a housing purchase transaction using a mortgage loan are presented in the diagram on p. 63. The last of the main types of lending to citizens that we are considering is credit cards.
Credit cards have become very popular lately, however, it must be remembered that credit with such cards most easily drives borrowers into debt bondage. Here's the danger: the cash limit opens, which you can use to purchase the necessary goods or services. You choose the option of repaying the loan yourself, the bank reports only the minimum amount that you must transfer to it monthly. However, this is where the trap lies: when calculating the minimum payment, the bank takes into account only interest payments, while the amount of the principal debt does not. Therefore, you can pay the amount indicated by the bank for years, and the total amount of debt will never be less. In addition, interest on credit cards can be very high. if you decide to use a credit card, be sure to find out for yourself such important issues as the cost of annual bank servicing, the annual interest rate for using his money, the minimum payment for repaying a loan with a card, the procedure for calculating interest for a loan, the availability of a grace period for using a loan , a list of benefits available on the card.
TO BE CONTINUED…
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