In order not to get lost among numerous bank offers and pick up a loan that can pay, you need to know the basics of financial literacy. A sufficient level of knowledge will help not only take reasonable decisions, but also contributes to the design of the loan on attractive conditions.
The interest rate is an amount in percentage expression that you must pay for the use of the loan. That is, if you took a loan under 13.5% per annum, then in addition to the loan amount, you need to list 13.5% of its value annually.
In the first case, the Bank adds all financial obligations, including interest. The resulting amount divides for the entire loan agreement. As a result, the amount of monthly payment is the same.
Differentiated payments imply that the amount of the principal debt divide equally for the entire loan period, and interest is charged monthly. In this case, the principal debt is paid faster.
We advise not to take the first loan. Examine all the conditions and hidden additions to it.
Many people do not guess that all the actions on the loan remain in credit history. In other words, the Bank transmits information about your delay, debts, not paying a loan and interest in the credit history bureaus. Data on your reputation is carefully considered by the Bank’s specialists when deciding to approve a loan or not.
If you have a spoiled credit history, you can try to improve it. By issuing microloans or buying goods by installments, to pay debt in time to the lender — all this will allow you to get one step closer to approval on credit.
Credit can be short-term or long-term. If you have a high level of income, stable work, then it is more profitable to take a short-term loan. Here, the amount of overpayment of the bank will be significantly less, and in case of early repayment, the overpayment will be minimized.
With a long-term loan, the interest rate will be higher due to the possible risks of the bank. As a rule, such a loan choose people with a small income, it allows them to feel comfortable. But for the bank, such a borrower is risky, as it can lose its solvency.
Confirmed income will increase all the chances of obtaining favorable conditions on the loan. Banks willingly go to transactions with solvent borrowers, offering attractive lending conditions.