What is necessary to know when making a loan?

Multiple polls among the population relative to credit showed that in most cases many of the respondents turned out to be financially illiterate. Those who have addressed the provision of a loan for various purposes and remained satisfied with the services provided by the services will surely get out of the services to the financial institution. However, many do not even suspect how banks earn their clients.


Interest rate

The concept of a loan includes payment for the use of borrowed funds, which is expressed in the interest rate. The interest rate may be nominally and efficient. The nominal interest rate is a fee for the use of credit funds. While an effective interest rate includes various costs of maintaining the loan itself. Therefore, it is not to be surprised when the financial institution states that the interest rate for the use of the loan is 13%, and in fact it turns out 15 or more.


Additional services

The most common earnings of financial institutions is the provision of additional services, such as the Commission for issuing credit funds. Therefore, before registration of the loan, it is necessary to carefully read the terms of the contract, where all hidden payments and commissions will be prescribed.


Return of borrowed funds

Credit Return Scheme The borrower can be carried out in two ways: repayment of equal parts or progressive payment. In the second case, interest on the loan is accrued to the balance of the body of the loan. Therefore, the amount of payment decreases each time.

It is also necessary to know whether early repayment of the loan is possible. As a rule, the borrower can completely return credit funds at any time, however, in some cases financial institutions impede it. This is expressed in the fines.


Currency

Credit can be issued in various currencies. Depending on the selected currency, the interest rate can differ significantly. Most credit experts recommend to take a loan in the currency in which the borrower receives the main income. This is due to currency fluctuations and can lead to a fairly significant loss for the borrower in the future.


Guarantee and pledge

In assessing the solvency of the borrower, the specialists of the financial institution may have doubts. Therefore, please provide the guarantor or a pledge is often practicing. Often this is due to the complexity of confirmation of solvency and there is nothing surprising.

The financial literacy of the population is an important indicator of the country's economic development, in addition, it can directly affect competition between financial institutions, which will inevitably lead to an improvement in the conditions for lending to the public as a whole. Spetial for traders who want to start crypto trading with margin cryptobrokers.top