Applying for a loan has become easier year by year. The instant levers that came on the market in 2005 got off to a very good loan boom. People easily applied for a loan via SMS and within minutes of the web. Many were excited to borrow a few hundred, forgetting to check the cost and interest of the loans. As a result, Good Lender became indebted at a considerable rate and many were caught in a bad debt spiral.
Fortunately, in 2013, the Finnish state intervened and the interest rate ceiling was set for fast levers. As a result of the interest rate ceiling reform, providing quick draws became unnecessarily expensive for many firms, so they either fell out of the market altogether or started offering flexible loans.
Flexicurity and consumer loans are easy to apply online, is a great place to start comparing and looking for loans.
However, it is best not to apply for a loan until you have determined what the loan will pay. In this article, we’ll look at what you pay for when you borrow.
The first thing to think about when it comes to costs is the nominal interest rate. The nominal interest rate is used, for example, in a loan agreement to tell you how much the loan rate is. In other words, the nominal interest rate is the basic interest rate on the loan. This indicates the amount of interest to be paid on the loan in full.
The reference rate and the marginal rate are related to the nominal rate. It is the marginal interest rate that the loan provider gains. Instead, the reference rate controls the level of interest rates on all loans. You have probably heard the names Euribor and Prime – these are familiar and well-known reference rates.
But keep in mind that the nominal interest rate does not reflect the total cost of the loan, as it involves a lot of other charges.
A start-up fee can be called by many names, such as a settlement fee or a raising fee – a beloved child has many names. However, they all mean the same thing, namely the payment of the start of a loan.
The name of the installment fee indicates whether it is a Flexible Credit or a one-time Credit. A one-time loan will usually be charged by the bank or the loan provider at the time of the loan, and will be automatically deducted from the credit granted to you. There is usually no set-up fee for a flexible loan. These loans are usually charged every time you withdraw. These costs can be very high, so you should pay close attention to how much you pay, especially for flexible loans. In one-time loans, the fee for setting up a loan is usually small compared to the amount of the loan.
Account management fee
In addition to paying a withdrawal or set-up fee, you will also have to pay a monthly account maintenance fee as long as the loan is open. Although the account management fee may be relatively small, for example USD 5 per month, it is still USD 60 per year. And the loan can be open for up to 2-3 years depending on the size of the loan.
The annual percentage rate
When comparing loans, a good benchmark is the actual annual interest rate of the loan. It well reveals the additional cost of the loans. It tells you how much the loan processing costs are, how much the advertising costs, and what kind of opening and service fees the loan has.
When the interest rate cap was set on instant lugs, the law stipulated that for loans below USD 2,000, the effective annual interest rate should not exceed 50%.
Total cost plus annual percentage rate
The actual APR does not help the borrower to determine how much the loan will actually pay as a whole, as its percentage can be quite difficult to compare with the size of the loan.
So, it is worth focusing on the true, true total cost, which tells the consumer how much the loan will cost. By comparing these, you can easily find out which loan is the most affordable option.
This is important because when choosing a more expensive loan, you may have to pay hundreds or even thousands more per year compared to if you had chosen a cheaper loan.
The longer the loan period, the higher the cost.
Good Lender have become indebted at a worrying rate in recent years. In 2016, the average loan term of Good Lender was up to 12 years. In addition, banks are beginning to grant much longer loan periods for mortgages. You can get a loan of up to 36 years from the bank.
While a small monthly fee of $ 5 to manage your account may sound like a very small amount, it’s already $ 300 in five years. Such small expenses of a few USD may therefore become an asset in many years. So you should pay attention to the total cost of the loan and compare the loans carefully to make sure you choose the cheapest loan for yourself. Otherwise, you may end up paying hundreds or thousands of USD more than you would like.
Where can I Find the Cheapest Loans?
There are a great variety of loans available on the Internet, from flexible loans to consumer loans. It’s easy to apply for a loan online, with just a few mouse clicks and easy loan comparison at any time of the day. However, a good rule of thumb is that online loans are often much more expensive than loans from a bank.
Loans on the Internet are great if you need an urgent loan, need a small amount and have an urgent need. Apply for a Loan through the Internet without any collateral or guarantees, in a matter of minutes.
However, if your loan needs are not up to date, you might want to talk to your bank and ask them what kind of loans they would have. Bank loans are a safe option as they often have much lower interest rates and charge much less for a loan than many online loans.
However, the internet is a great way to compare loans and look at the average cost and interest of loans. For example, you can submit a single application through the Loan Comparison Website to get many different loan offers. There is nothing to do and you can compare the interest rates and costs of your loans. Then you can go to your own bank to apply for a loan and compare their loan offers to the ones you get online.
Lenders should make a profit on their business. That’s why loans cost so much. This is a good thing to remember when applying for a loan. You probably wouldn’t open up a phone subscription without comparing prices a bit in advance, so it’s best not to borrow without comparing their rates and other costs. Comparing loans well in advance will ensure that you get the cheapest loan possible and don’t overpay.
It is a good idea to first look at the different terms used in applying for a loan and in contracts. This way you know what the loan prices really consist of. Knowing what your loans are made of and what the average cost of all the loans is for you can make the wise decision and choose the right loan for you.
Online loans are often a very attractive option for borrowing because you do not need any collateral or guarantors, you can apply at any time and get a preliminary loan decision very quickly. Many times, even within minutes.
However, bank loans are usually a much safer option. While applying for a bank loan may take a little longer and you may have to wait a couple of weeks for your money, it can be much more profitable to run in the long run as you often save money. For example, if you pay $ 8 per month for a net loan account, you pay $ 480 over five years. Conversely, if your bank loan has an account maintenance cost of $ 5 per month, you pay $ 300 over five years. In other words, you save 180 USD.
So you literally save money when you take the time to carefully compare your loan. Be patient, go talk to your bank, and do your homework carefully. With that $ 180, you can already pay for a month’s grocery shopping, or even a few pairs of new shoes.