When lending to many people, the question arises: "Where can I find a loan with a low interest rate?" After all, no one wants to overpay. When choosing a bank, as well as a loan program, you should pay attention to some nuances.
The interest rate in itself does not provide comprehensive information about the total cost of the loan, since in advertising, most likely, all commissions, insurance and other payments are not announced.
Cash loan, on a bank payment card, goods on credit - a dilemma for the borrower. Interest depends on the choice of a loan program. The most expensive type of loan is a cash loan. The low interest rate in this case will be balanced by additional commissions. Another thing is goods on credit. This is the cheapest type of consumer lending, because in this case the bank takes the goods as collateral. A bank card loan is also an interesting product. In most cases, the bank makes it possible to use credit facilities on preferential terms for a certain period (30-50 days). This is an opportunity to save on interest.
If you need a significant amount of money for consumer needs, it is sometimes easier to use a product such as a consumer loan secured by property. In this case, there will be the lowest interest rate. The loan is issued mainly for a long time, which will significantly reduce the burden on the borrower.
Consider the common pitfalls for borrowers.
Hidden fees in the form of loan insurance
Such insurance is more likely the sale of additional banking products than a necessity. After all, basically, the borrower is insured against an accident, and not against non-return of funds.
Monthly loan management fee
Even if the interest rate is attractive enough - do not rush. Consult with the manager about commissions. As a rule, banks, offering a loan with a low interest rate, ensure the profitability of the organization due to the monthly commission. The size of such a commission ranges from one to two and a half percent of the original loan amount and is paid monthly.
Commission for issuing a loan
As a rule, this kind of commission is used only when issuing a cash loan. The cost of the commission depends on the loan conditions and is measured as a percentage of the amount of the loan issued. You can also meet a commission for withdrawing credit money through a bank cash desk or ATM.
Early repayment fee
Sometimes you can find a fee for early repayment of a loan in bank loan products. This increases its value for the borrower, and in this case, a loan with a low interest rate is much more expensive than the same in another bank with a higher interest rate.
Thus, we focused on those points that significantly affect the decision when obtaining a consumer loan. This makes it possible to calculate all the costs, pros and cons of obtaining a loan for a particular program and really get a loan with a low interest rate, rather than a huge baggage of overpayments.