Currently, there are a great many proposals from commercial banks and various lending funds. They lure potential clients with promising advertisements about low interest rates and favorable loan terms. In fact, sometimes the reality is far from this - a client who has entered into a loan agreement has to overpay many times.
Instructions
Step 1
It is quite natural that people, when choosing a lending organization: a bank, a lending fund or a financing center, pay attention to the terms of the loan and, first of all, to the interest rates on them. Often they enter into a contract where the rate for the use of funds is lower. However, borrowers do not take into account the size of one-time and monthly commissions, the amount of penalties for early repayment, etc. Sometimes a loan where there was a statement of a lower interest rate is much more expensive for the client.
Step 2
Therefore, when contacting any credit institution for funds, it is imperative to find out whether they have commissions, fines, penalties and other monthly and one-time payments. Be sure to take into account the amount of insurance that is required for some types of lending, for example, with a car loan or mortgage. Sometimes, when providing even a consumer loan, banks force the borrower to insure his life and health, especially if there are no other types of loan security (collateral or surety).
Step 3
To find out the payment for the use of borrowed funds, you need to calculate the monthly payment taking into account the declared interest, and then add the resulting numbers. As a result, you get the amount that must be returned during the validity period of the loan agreement. All insurances, commissions and other obligatory payments should be added to it. If you subtract the requested loan amount from the resulting number, you will get the borrower's overpayment for the entire loan period. As a percentage, it will look like the ratio of the overpayment on the loan and its original amount, multiplied by 100 percent. This will be the actual payment of the client for the use of other people's funds.
