10 things you need to know about loans
April 3, 2019
Loan money is easy to get, but rash loans and the wrong attitude to repayments often lead to the formation of bad debts. Each condition of the bank hides the nuances, not knowing which the borrower runs the risk of repeatedly overpaying on commissions and fines.
Forewarned is forearmed
Crediting has its own secrets, the knowledge of which will help solve financial issues with minimal expenses and pay off the creditor.
More documents – more profitable loan
The main overpayment for its services depends on the bank rate. The higher the risk of the transaction, the more expensive the cost of the loan. If the client presents an exhaustive package, the bank is more likely to provide a loan, being confident of a safe return.
Coming to the bank, pay attention to programs that require proof of income and a maximum of references. Do not be too lazy to collect a list of papers, borrowers save up to half the overpayment. For payroll clients, there will surely be programs with individual conditions, with a rate of 0.5-1% lower, and employer documents will not be required.
In other cases, reducing the loan rate will help:
- copy of labor;
- contracts with other employers, where a person got a job;
- extracts from other banks where deposits are issued.
Confidence in the borrower will give a certificate of real estate and vehicles, passport with a fresh visa marks.
Making personal insurance is optional
Loans are often offered at a reduced rate, subject to the conclusion of a personal insurance contract. If you do not be lazy and calculate overpayments at a reduced rate with the costs for the policy, and then compare it with the total loan interest, the difference is often not in favor of insurance.
In some cases, insurance can not be avoided if it is insured:
- pledged property;
- mortgage housing;
- life when using mortgage programs with government support.
The Consumer Rights Act prohibits imposing additional insurance services if the borrower refuses them. If there is any doubt that the issue of funds will be denied without insurance, you can use the so-called. cooling period, demanding the return of funds paid within the next 5-14 days after the purchase of the policy. In this case, you should be prepared that the bank will increase the interest on the loan.
When insurance is a mandatory part of lending, it is recommended to study the rates of all accredited insurers, since prices may vary significantly.
Without the consent of the spouse will not give credit
If the loan is taken by a family man, the bank will ask him to issue a written consent with the credit obligations of the legal spouse. This requirement is closely related to the norm of family law, which asserts the equality of rights to property acquired during marriage, drawing an analogy with the financial obligations of a married couple.
If there is a strict rule of compulsory consent of the second half for mortgage loans, which is often expressed in attracting a spouse by a co-borrower, then there is no definite setting for other lending programs. Registration of a consumer loan for a small amount often occurs without the participation of a partner; you need to carefully study the conditions of the bank and its lending policy.
Each bank has its own loan repayment policy.
At the time of disbursement of funds it is not always possible to carefully study the terms of debt service and the procedure for making payments. If you are not careful about signing the contract, there is a risk in the very first month to run into problems when repaying the debt.
Problems are avoided by those who have read the paragraphs written in small print, the section on repayment. Ask the manager questions before signing the documents.
Otherwise, the borrower is waiting for:
- fine for late payment;
- recharge commission;
- Additional fees associated with the interbank transfer.
When signing a loan agreement, ask:
- When the next payment is debited.
- How to make money.
- How to find out the amount of the fee.
- What sanctions are provided in case of a delay in payment.
These are the basic parameters that any bona fide payer who regularly makes credit payments knows.
Minimum credit card payment increases overpayment
When an SMS arrives with a reminder about the amount of payment and the period of write-off, this means only the minimum that a person must pay. In fact, the more funds are credited to the account at the time of debiting, the lower the debt and the subsequent interest accrual. A smaller contribution entails an increase in the total credit card rate.
Early repayment needs prior notification of the bank
Monthly replenishing the balance of the loan account in a larger amount, a person is in the belief that the principal debt is reduced. In fact, the amount is accumulated on the account without debiting. To reduce the debt, the borrower is obliged to notify the bank in advance of the upcoming repayment out of schedule and write a statement requesting recalculation of subsequent payments.
Credit debts are divided between former spouses
If the spouses break up, not only the property is divided, but also the obligations to the banks, regardless of who the main borrower is. The main circumstance for the court is to convince that the borrowed funds are used for the benefit of the whole family.
In the absence of grounds for considering a loan to be spent on both spouses and their children, obligations to the bank are often reserved for the spouse who signed the loan agreement.
The bank allows you to revise the rate
Loan rates often change, given the new circumstances of the banking sector. Having taken a large loan a few years ago, one cannot be sure that in the process of repayments the standard programs of the same bank offer reduced credit rates.
Refinancing allows not only to revise the terms of repayment in the bank, but also to consolidate the obligations of several lenders at once. If it is impossible to revise the parameters of a loan within the same financial institution, it is allowed to refinance in a new one.
Do not shy away from negotiations if it becomes difficult to repay a loan
When they make out a loan, the bank is shown its financial solvency, solvency, convincing in the reliability of cooperation. But to avoid financial difficulties sometimes fails, and this leads to the formation of delinquency and the creation of greater difficulties in finding funds to pay off the bank.
It makes no sense to hide the problems that have arisen, since silencing the problems leads to the accumulation of debt and the charging of fines by the bank. Timely notification of the bank will help make the right decision. In this case, the following is possible:
- rate review;
- extension of the repayment period;
- granting a deferment.
In fact, such conditions are called restructuring, and the bank is also interested in revising the conditions, as it needs:
- in receiving the planned income according to the schedule;
- successful return of the entire amount with interest.
The reason for the revision of the loan in the bank will be the provision by the borrower of certificates and papers confirming serious difficulties and compelling reasons why the client cannot repay the loan debt (dismissal, serious illness, reduction, reduction in earnings).
If the loan is not repaid, the heirs will pay.
The law is such that in the case of the remaining outstanding debt to the bank, the heirs will have to accept not only the property of the deceased, but also his debts.
If the debt balance is large, it is recommended to check whether it does not exceed the value of the accepted inheritance. If the testator managed to get insurance during his lifetime, then the creditor’s claims will be forwarded to the insurer, and the heir will not be prevented from obtaining the inherited property.
The simplest rules will help the borrower to obtain optimal conditions, as well as pay off with the bank with minimal financial consequences. The signature on the loan agreement entails serious obligations. Be careful when making a loan.