Borrowing money is always associated with great responsibility, numerous consequences and sometimes consequences. Borrowing money from a bank is much more complicated, subject to numerous laws and regulations, and penalties for repaying a loan too long. It is better to find out in advance about everything about cash loans before you put yourself against the wall.
Cash loans, unlike cash loans, can only be granted by banks and financial institutions. Due to their rather low amounts, they are granted for shorter periods than mortgage loans. Usually they are from a few hundred dollars to a dozen or even tens of thousands. Larger amounts of several hundred thousand are usually offered only to companies that meet the higher requirements that the bank will set for them. Taking into account all borrowers, the highest achievable value of cash loan is $ 150 thousand, and the longest repayment period up to 10 years.
Because they are granted for a much smaller amount, they do not require as much security as a mortgage. Despite this, the bank must check the applicant’s creditworthiness, the amount of his remuneration, and in the case of larger amounts can ask for a co-borrower, credit insurance, a guarantor or a pledge in the form of a car or real estate.
You can apply for a loan by phone, online or at a bank branch. Often, the bank’s regular customers get the biggest discounts, but it’s worth checking the conditions at various institutions.
The necessary documents will be an ID card and income certificate. The employment contract is rated best, but the commission contract and proof of regular payments do not compromise your credit chances. However, the larger the loan amount, the longer it will take to process your application. It is often even a few days. With less capital, it is limited to one day or even several hours or minutes.
Consumer Credit Act
Cash loans are limited and defined by numerous acts. The most important is the Consumer Credit Act. It provides us the opportunity to withdraw from the contract within 14 days without any consequences. At the same time, it guarantees us the right to repay the entire loan ahead of time without incurring additional costs. This is consumer protection because it is much less profitable for a bank to pay back a loan faster. The difference in insurance and commission fees due to the change in the repayment date should be returned to the customer.
The most important thing to check when taking a loan is its interest rate, because it is this percentage that shows how expensive the cost of the loan will be. Its maximum value is four times the Lombard rate (16%). Often, commissions, margins and insurance costs are added to this amount, so the interest rate itself does not determine the final installments.
We can choose fixed or variable interest rate. Fixed interest is much more popular because it increases the chance of getting a loan. Creditworthiness is calculated on the basis of the first installment, which in the case of a fixed interest rate is lower than in a variable rate. Installments in this case are always the same, although the interest-capital ratio changes in each subsequent installment.
Floating interest consists of a constant margin and a variable market situation. If the interest rate on the interbank market changes, the interest rate will increase or decrease.