Is it possible to take out a loan without risking the wallet? With a careful and competent approach to this matter - of course, yes. To do this, you must carefully study the conditions offered by various banks and not be afraid of unnecessary questions.
Many people today are thinking about how to get a loan in the most profitable way, without unnecessary overpayments. Many financial institutions offer a huge number of loan products, but how not to get confused and choose the most suitable one? To do this, you need to know the basic principles of lending and the pitfalls that lie in wait for borrowers at every step.
Bondage or Benefit?
If you urgently need money, it is quite easy to decide on a loan obligation. However, do not trust the colorful advertisements about minimum percentages. Typically, most banks try to balance their credit risks by adding exorbitant commissions and insurance premiums to the annual interest. If you have decided on a large long-term loan, be it a mortgage or a car loan, you should pay attention to the reliability of the bank. And in this case, there is no way to hide from insurance premiums. A consumer loan is usually issued for a shorter period, but this is by no means a guarantee against unnecessary overpayments. Carefully study the total cost of the loan, which includes not only annual interest, but also other payments.
Do not forget that financial institutions carefully analyze information about a potential borrower, so do not neglect banks, where they ask you too many questions. Basically, exactly where a lot of information is specified, they offer the most favorable conditions.
It is worth realistically assessing your capabilities, and if the loan payment is more than half of the family's monthly income, you should not go into bondage.
Which schedule should you choose?
The proposed loan repayment schedule can be of two types. The first is to pay a fixed payment every month. The second is the classic scheme, according to which the amount of debt is divided by the number of months of lending, and interest is charged each time on the balance of the debt. Each chart has its own advantages and disadvantages. An annuity is suitable for those who do not expect to repay the loan ahead of schedule and who are comfortable paying the same amount every month. In this case, the total overpayment will be higher, but the loan burden is quite comparable to income. The second option is more suitable for borrowers who have early repayment planned in the future and the classic schedule is suitable for monthly income. Of course, when interest is charged on the balance of the loan obligation, there is much less overpayment. The more the borrower repays the "body" of the loan, the less interest is charged.
