Wondering how to choose the most favorable loan offer? Every day we are attacked by lots of ads that encourage us to take a loan. Especially in the pre-Christmas period, the intensity of this type of advertising campaigns is very high. How to choose the best one in this maze of offers? How to check which offer is the cheapest? It is not that simple, but the loan calculator can help us. Just enter the basic data and get an overview of the result on the loan. Of course, the issue of the attractiveness of the loan can also be assessed by themselves, checking the costs it entails. By reading this article, learn what to look for when choosing the best loan offer, how to assess costs, and how to use the loan calculator. We invite you to read.
Loan – what is it?
A loan is an agreement between the lender and the borrower. The first party to the contract lends a certain amount of money to the other, and must own the money. The rules for concluding loan agreements are regulated by the Civil Code. The lender can be a bank and a loan company, but also SKOK, a business entity and even a natural person. Loans granted by banks are slightly different from loans granted by other entities. Banks operate under the tutelage of the Polish Financial Supervision Authority, which through its recommendations instructs them to treat loans on the same terms as loans. And these are regulated by the Consumer Credit Act.
How do you choose the best loan?
How do you choose the best loan offer? Of course, the best loan is the cheapest. But not always the cost of the loan – which is discussed later in this article – is the most appropriate measure of the attractiveness of a loan. Customer service by loan companies or banks is equally important. To get information on this topic, it is worth following the online forums and discussion groups on Facebook. It is also very important for clients whether all the formalities related to servicing the loan can be arranged through the internet. Some borrowers take such aspects into account first. However, if we find several suitable offers, one should look at the costs that will be associated with them. The loan calculator will help us.
There are many websites on the internet where you can find a loan calculator. This is a very simple and intuitive tool that will allow us to determine the cost of the loan, as well as the amount of monthly installments. All you have to do is enter the basic data – the amount you want to borrow, the loan period and the interest rate on the loan. The calculator will simulate and we will get results that will allow us to assess whether the loan is attractive to us. Not every calculator is professional enough to be worth using. Look for those that have a user manual. Incorrect input of data can in fact see the results. We must also remember that the calculator results are for reference only. How we interpret them will depend on the level of our knowledge about finances.
How much does the loan cost
The loan calculator will allow us to estimate how much the loan will cost us. The interest rate, which we have to enter in the calculator, has the greatest impact on the amount of costs. The loan interest rate is provided by lenders on an annual basis. It may not, however, exceed four times the lombard rate. The interest rate can be fixed or variable. Fixed interest maintains the same amount throughout the period during which you will pay back the loan. Floating interest, in turn, consists of a fixed (margin) and variable part. The amount of the variable part of the interest rate depends on the reference point. Usually it is WIBOR – interest rate which is used on the interbank market. Other loan costs include commission and preparation fee.
How to assess the cost of the loan?
How can you assess the cost of the loan at a glance? The Real Annual Interest Rate – APRC gives us a lot of information. This is a parameter that is calculated equally by all loan providers. APRC includes the nominal interest rate mentioned above, as well as commissions and other fees related to granting the loan. That is why it is a good tool for comparing many loan offers. In this way, however, we can compare offers with similar parameters. The loan amount as well as the loan period will be key in this case. How else can you assess the cost of the loan? In principle, it is enough to multiply the number of installments by their amount and we already know how much we will pay.