What affects the interest rate on the loan?

How often do you not notice in advertising of regular favorable conditions on the loan to the prefix «from» before the amount of interest rate? And then, deciding to submit an application to discover a completely different figure offered by the bank, which makes you think about what affects the interest rate.

Any lender is in order to make its customers to make long-term loans for large sums. In this case, the overpayment will be big, which will bring a significant profit to the bank. Then the borrower is offered, as it seems, more favorable conditions are a lower interest rate.

Short-term loans are implied by a small amount of debt payment, so the rate will be higher here, as the overpayment will be less that it does not allow the bank to earn more money on you than if a loan has been taken for a long time.

Below is the key rate that the main bank of our country establishes, no creditor will set the interest rate in its bank. This is again due to the fact that the bank in which you issued a loan should receive income.

The growth trend of the price level causes banks to predict the estimated profit for dozens of years ahead. So, if we, for example, talk about mortgage loan, then it can be issued for up to 30 years, and the rate should be fixed, and the risks of the bank are as reduced as much as possible.

To date, it is rare to find a bank in which insurance will not be offered followed by a decrease in the interest rate on the loan.

Insurance is not a prerequisite for issuing a loan, but the Bank has the right to raise a bet after the client’s failure from the design of the insurance policy.

Credit reputation is considered by the Bank first of all when making a decision on approval of your loan.

In order to protect yourself from the loss of funds, you will be appointed a higher interest rate.

Having a deposit is a guarantee of payment of the entire amount of debt on the loan, which means the maximum reduction in risks for the non-return of funds to the bank.

Thus, on the basis of the foregoing, it can be concluded

The rate of the bet is selected individually for your financial and financial position, and can be regulated by the bank at its discretion.

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