People are becoming more positive about loans and are bolder in borrowing. The reason for the high borrowing mood is the low interest rate, which is currently at a record low. Whatever the loan, their interest rates are very favorable nowadays compared to recent years.
When choosing a loan, it is important that you choose the right loan for your loan purpose, as it is most likely to be used most efficiently, and the risk of indebtedness is also minimal in this case. Currently, consumer credit is gaining in popularity.
Unsecured personal loan
It can be debt settlement or freely usable. In the case of debt settlement, the loan is tied to a specific purpose, and in the case of a freely available loan, the borrower spends what he or she wants. Unsecured personal loans are income-based , meaning that the bank is guaranteed that it will pay off the loan taken out, its proven income.
For employees, banks generally accept income by transfer, and in many institutions, it is a disincentive to receive your payment in cash. Where a credit institution accepts cash income, they usually require a previous year’s NAV income certificate in addition to the employer certificate.
One of the most important factors for loans is interest and APR. The APR for unsecured personal loans ranges from 10% to 24% and the interest rate from 9.5% to 18%. With discounts and higher income, the APR can be reduced by up to 8-12%. The interest rate is also influenced by the maturity and the amount of loan taken out. Be sure to read the loan agreement carefully so that you know exactly what other costs may be incurred that are not included in the APR, but must be paid off. The contract also stipulates the consequences of not paying the installment on time.
With a credit card, you can use your bank’s money up to a predefined limit. You don’t have to spend this, but sometimes a little quick financial help can come in handy. Usually you have 45 days to repay the amount spent, free of interest. Importantly, this is not a time interval from the first spend, but a predefined date.
It is not the date of your payment that counts, but your receipt at the bank. For credit cards, the APR is currently around 37-40% , which is quite high. You may accumulate debt if you reset it and cannot fully repay it. It is forbidden to withdraw cash, it starts to pay interest immediately and costs a lot.
With a credit card, it is easy to accumulate debt and scroll in front of you. In such a case, it is advisable to ask the bank to close the card and enter into a payment agreement. If it hasn’t gone too far, you can usually do it at the banks, and it’s still a cheaper option than accumulating debt.
Overdraft provides flexible assistance in managing your finances
This means that the credit is always the same, and once you pay it back, it is at your disposal again. Credits to your bank account will be automatically refunded. In other words, the bank allows the current account balance to be negative up to a certain amount. The amount of the credit line is determined individually, which is usually the amount of one or two months’ income.
It is a good idea to be alert when using it, as its costs (handling fee, credit assessment fee, availability commission, etc.) can go unnoticed. It’s a good idea to review your bank account statement in detail to avoid paying excessly, since obviously the bank does not guarantee that your bank account will be constantly down for free. You should also be aware that if you do not have enough income to cover the costs in addition to the loan, there may be late interest and other penalties.
Credit for the purchase of goods
Throughout the year we can see department stores promoting 0% APR, in most cases it is worth taking advantage of this because it offers interest-free installments. Often, there is no other option than borrowing a commodity if you need something that is essential and has not been calculated, its value will not be covered by a set-aside.
Usually, the merchant determines which financial service provider you work with. The great advantage of a commodity purchase loan is that it can be obtained quickly and easily at a lower income. It is important to know that if the product you select is not part of the 0% APR promotion, it can be very expensive as its APR is close to 40%.