Loans for any purpose are sometimes the only option that can help you fulfill your dreams. You can have a renovation of an apartment, a journey of a lifetime or equipment that you would put off for years “here and now”. I do not support excessive debt, which can lead to you falling into a spiral. However, I assume that with proper analysis of your home budget, cash loan can be a good solution (and sometimes it is the only one).
What to look for when looking for a cash loan?
Just because you see 0% commission at every step in banks ‘and financial institutions’ ads or are tempted by the message ‘the lowest interest rate on the market’ does not mean that you will not incur costs related to your loan. That’s why you need to know what to look for when looking for the best deal for you.
Top 10 most important parameters that you must pay attention to when looking for a cash loan
- The cost of credit is one of the most important aspects that you need to pay attention to. It’s worth remembering what makes up it. Just because the interest rate or commission will be reduced to zero does not mean that the loan will be the cheapest. Therefore, always pay attention to the amount of APRC (Actual Annual Interest Rate). This is the total cost of the loan, which includes the cost of granting the loan, interest rate and commission.
- Budget analysis will help you determine what monthly installments you can pay. Never take credit on impulse. Carefully analyze your income and expenses, check if you can afford a loan. Increasing the duration of this commitment will increase its cost, but in return you will have a lower installment that will not burden your budget heavily.
- The purpose of a cash loan is usually any, meaning you do not have to share with the bank information on how you will use the money you borrow. Although remember that if the goal is to buy an apartment or a car, a mortgage or car loan will be cheaper products.
- Repayment of the loan on time is very important. The arrears in repayment may cause the bank to report you to BIK and in the future you will have problems obtaining any credit product. In addition, you will pay large interest for the delay.
- Insurance is not mandatory, so you should consider whether you need it (especially if the loan amount is not high). Insurance is an additional cost and primarily protects the bank. The scope of protection is very diverse, usually an insurance company, in return for a premium received, repays the remaining debt in the event of the death, permanent disability or incapacity of the borrower.
The bank may offer you a lower interest rate or a lower commission if you decide to take out loan insurance. Usually it won’t be profitable for you. The cost of the insurance premium may be higher than the benefits that come from lowering the interest rate or loan commission.
We have it at Totalmoney: Check the cash loan interest rate
- The bank is required to provide you with an information form before signing the contract. The document should be presented in a simple form and contain information on all fees that you pay in connection with the loan.
- Equal installments or decreasing installments? The choice of course depends on you. Equal installments are a fixed amount that you pay monthly for your cash loan. They contain the repaid debt with interest. At the beginning of the loan you pay more interest and less capital. Later these proportions are reversed.
Decreasing installments get lower as time goes by. They include a fixed amount of capital (debt repaid) and interest accrued on the outstanding liability. In the case of decreasing installments, you pay back capital faster and the sum of interest is lower than in the case of equal installments.
- You can withdraw from a cash loan in accordance with the Consumer Credit Act. You have the right to change your decision, even after the loan is released. You have 14 days to withdraw from signing the contract. You must then add interest to the amount returned from the date of loan disbursement to the day of repayment.
- You can pay back your cash loan sooner. The bank is obliged to give you this option at any time. You can pay off all or just part of the loan. However, remember to check that you do not lose on this, because the bank may charge an additional fee for repayment of the loan ahead of schedule.
Just pay attention to the above factors. Certainly it will pay off for you and choose the offer that will be the most advantageous and best suited to your expectations.