The most favorable loans “bombard” us from all sides. Everyone is the “best”. Is there a way to evaluate ourselves anyway?
The most favorable loans are easiest to choose by comparing the conditions under which various commercial banks lend, that is, by comparing the effective interest rates (EIR) of credit products. A lower effective interest rate represents a more favorable loan.
The article deals with the subject in detail. If you’re just looking for the best line of credit and don’t have time to read, you can fill out a credit questionnaire right away. Currency risk and interest rate volatility are not included in the EIR
The EIR is a measure of the true cost of a loan, but only if you borrow in local currency and at a fixed interest rate. Specifically, EIR does not include currency risk and interest rate volatility.
It is imperative to pay attention to credit costs that are “bundled” but not included in the EIR. Fees included in the calculation of the EIR, with the exception of the nominal interest rate (NIR), are usually paid to the bank on or before the date of the loan, ie the signing of the loan agreement.
Banks often present secondary security instruments as arbitrary and do not include them in the EIR. On the other hand, these same collateral are conditioned by banks, and this significantly increases the real cost of the loan.
Before submitting your credit request, please note the following:
- What is the effective interest rate (EIR) and what are all fees included in the EIR calculation?
- Is the nominal interest rate (NIR) fixed or variable?
- On what day of the month is the bank debiting the installment to calculate intercalary interest?
- Determine the total amount of interest and any fees you will pay to the bank.
- In what currency is the loan indexed?
- What is the cost of securing a loan?
(risk or mixed insurance premium, loan repayment insurance premium, real estate insurance, real estate insurance, deposit, money fund deposit, etc.)
- What is the cost of obtaining the required documentation?
(appraisals of the value of real estate or real estate, compensation for the bank’s registration of real estate or real estate, registration with the competent authority, obtaining extracts from the land registry, obtaining certificates, certificates, permits and decisions of the competent authorities, etc.)
- Is it a loan with a down payment?
- Does the contract provide for early repayment of the loan, ie reduction of principal and what are the conditions in these cases?
The Bank reserves the right to amend certain loan conditions
Most often, the bank reserves the right to change certain loan terms and conditions, regardless of the client’s will. It is important to check what conditions a bank can change and in what situations.
For a large part of the fixed interest rate kuna denominated in the market today, a bank may change its interest rate in certain circumstances.
Prior to submitting a loan application, it is important to pay attention to the terms of the loan, but also to the conditions for closing the loan. It is important to know when the loan can be repaid early.
In this case, it is necessary to find out whether the regular interest is converted in this case due to the change in the loan repayment period and whether, and in what percentage, the prepayment fee is charged.
Although the EIR is the most important criterion, the most favorable credits deserve this title only when they meet the other criteria.
Progress is here for you
It is very possible that with a lot of research, studying, studying the banks, and then walking around the branches, collecting documents, etc., you could choose the most favorable loan for yourself. But why?
Comparing lines of credit on specialized portals or visiting numerous bank sites can never result in the right picture. That is why it is often the case that our clients come with a line of credit already chosen , which turns out to be not the best for them at the moment or for some reason they cannot get it. In other words, unfortunately, they were wasting their time.
The Best Progress Group expert team is here for you. Leave the hard part to us. Try our credit form where you can enter your situation with complete confidence and discretion, and we will do a thorough analysis and guide you to the optimal solution. The best loans are there, it pays to know it couldn’t have gone better.
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A more expensive TV has a better picture. More expensive credit has more installment and nothing more. With Progress you save money and time first and foremost. Complete the Best Progress Credit Questionnaire.
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