At present, the financial and economic state of the state is completely determined by the state of the banking system. On this basis, the financial structure of the state should develop with positive dynamics and be strengthened, and without ceasing. This need is inevitable, since banking institutions form one competing confrontation with one another, aimed at expanding the potential client base. Banks today have a huge range of various financial services, both for enterprises and individuals. Meanwhile, the fundamental direction of banking institutions is determined precisely by lending, the income from which in most cases is obtained from such an indicator as the effective interest rate.
Lending to firms and individuals for any banks is a priority way to make a profit. It is on this basis that the provision of loans to banks is the main activity. Lending itself can be carried out in different schemes and areas: consumer loans, loans for the purchase of housing, loans for businesses and more.
Banking institutions attract their customers by a wide variety of methods and promotions, including: low interest rates and effective rates. In addition, banks often offer interest-free loans, comfortable schedules and original debt repayment options. In the vast majority of cases, these marketing moves are a common ploy of financial organizations, since no one will work at a loss. Therefore, it would seem that the effective interest rate on the loan is sure to bring income to the bank.
Even if the loan interest is minimal or interest-free loans take place , the bank will receive income from all kinds of customer service commissions.
That is why every customer should know what an effective bid is. If the borrower does not have sufficient knowledge and calculation skills, then this indicator should be calculated by the loan specialist during consultations regarding the terms of the loan.
The effective interest rate is the total credit value, which contains, in addition to the nominal interest rate, the costs associated with processing and subsequent servicing of the loan. Based on Russian legislation, since July 2007, all banking institutions must provide borrowers with calculations of the effective interest rate on a loan. For a client of a banking institution, this is useful in that it is possible to really assess the upcoming overpayments. There are a large number of variations in calculating the effective interest rate. Users of the World Wide Web are given the opportunity to calculate it through a specialized calculator located on bank portals. In order to get a full payment, you need to know all the payment indicators that must be paid for the loan period. The effective rate for the full loan term is distributed and is characterized by a percentage of the loan amount.
Before applying for a loan, the borrower must thoroughly examine all the clauses and conditions of the loan contract, and in particular the section on the effective interest rate. It will not be superfluous to familiarize yourself with several banks at once in order to make the right choice.
Naturally, far from all borrowers, the effective interest rate is the main criterion for choosing a bank. Many borrowers give preference to reliable and trusted banks with a worthy reputation, even despite the high interest rate.