Modern people are so accustomed to banking products and services that they no longer wonder where to get money, if you really need it. Well, of course, at the bank, especially if it provides a grace period for using money on a credit card or makes it possible to repay a loan taking into account the minimum interest rate.
Which loan is considered profitable?
Thinking about “what loan to take?”, Many do not know by what criteria to make an assessment and, accordingly, a conclusion. The thing is that for everyone the concept of “profitable loan” means a different set of loan properties. For some, this is the minimum interest rate , for others, the possibility of early repayment , for others, the minimum set of documents and conditions from the bank.
However, it is worth noting that there is an optimal set of criteria that correspond to the concept of “profitable loan”.
Among these criteria, it is worth noting:
- The optimal interest rate . This is not the lowest percentage, since low rates are just a trick for illiterate people, but an average percentage that would suit both parties.
- Reputation of the bank that issued the loan . This means whether the bank is famous for dishonest deeds behind customers, forgery of documents, threat and blackmail of its debtors. If such facts exist, then it is better to refuse a loan at this financial institution.
- Loan repayment term . It should be optimal for both the bank and the borrower, because the size of the monthly payment will depend on the loan term. This monthly payment should not be too much of a burden on the family budget.
- The absence of additional costs to the loan in the form of various insurances, guarantees, services of third-party organizations, fees for cashing out credit funds and other things. Many banks pursue a dishonest credit policy, setting a minimum interest on the loan, but including in the loan agreement various additional expenses, which the borrower will find out after.
The presence of at least a few conditions that satisfy the wishes of the borrower sometimes becomes sufficient to obtain a loan.
What loan terms are considered beneficial?
Unfortunately, it is impossible to find optimal conditions for all types of loans, they should be considered separately. So, for example, for a mortgage, the following conditions are advantageous:
- The optimal down payment . Here everyone judges by the size of their wallet, because someone lacks quite a bit to buy a home, and someone almost an entire amount. So, experts believe that the optimal down payment is 20-40% of the value of real estate.
- Loan currency . If a bank offers a mortgage only in foreign currency, operating in that it is much more profitable, do not flatter yourself. The currency in the country is only growing and not going to fall, so today the mortgage in the national currency comes to the fore. Although, of course, the interest rate on the currency mortgage is much more profitable than in the ruble mortgage, but this is a payment for great risk.
- Lack of imposed additional services . For example, banks often offer to insure housing against various occasions, or impose the services of realtors who charge too high a percentage for their services.
- Mortgage interest rate and method of calculating monthly payments. There are several ways to accrue interest, in one case it can be the total interest on the entire body of the loan, which is evenly distributed over all months of payment of the debt.
Thus, a loan with the following conditions can be called a favorable mortgage: the average interest rate with the condition that the amount of the debt be recalculated, the optimal down payment (20-40%), the absence of additional costs and services that are imposed by banks.
As for car loans, most conditions for this type of loan remain the same, but car dealerships are sometimes tricky. For example, they can demand from the borrower insurance not only for the car, but also for their lives, and this is a significant waste of money.
In addition, you need to take a car loan at car dealerships that cooperate with certain banks, because then you can get under the affiliate program and get more favorable conditions, if you can look for a bank for lending yourself.
Not everyone can get a profitable loan, which is what dishonest bankers actually use. Therefore, all the nuances need to be clarified “on the shore”, even before the paperwork.