There are many types and types of loans on the market. Some differ more, others less. If you get advice from a professional financial advisor, you don’t step next .
What to watch out for?
Regardless of the type of loan, we assume that always when choosing a loan focusing on the amount of interest, or annual interest rate, you know under the name pa Interested However, you have also called. APR (annual percentage rate). This includes other costs associated with setting up a loan , which are sometimes hidden. This may be more or less a hidden fee, credit insurance required by the bank, fees for the account that the bank creates for you, etc. The APRC rate may be incomparably higher than the annual interest rate .
In the course of repayment, the fee / penalty for early repayment of part or all of the loan may be very expensive. Sometimes it is not even possible to repay the loan at all!
Types of loans
The suitability and type of credit should be discussed individually with a financial expert .
- A special-purpose loan means that the bank determines what the debtor uses the money for . The most common reason for use is the solution of the housing situation. The client can secure such a loan either only by demonstrating a sufficiently high own income or by pledging the property . In some cases, the bank requires collateral by the guarantor .
- A non-purpose loan means that the bank does not determine what the borrower will use the money for . The most common reason for use is the payment of goods or bridging the bad financial situation of the client. In general, the interest rate is clearly higher than a special-purpose loan (mostly housing finance).
- For the purpose of financial settlement of property liabilities it is possible to use a loan, which is considered as a special purpose loan. It solves the housing situation of the new debtor, because he needs to pay the share of the co-owner of the property in order to become the owner of the property in question. The most typical cases are to deal with divorcing spouses or to pay a sibling on the basis of an inheritance .
- When choosing a suitable way of financing the construction of real estate , a very important criterion is the ratio between the price level of the whole project, the estimated so-called price of future and own funds (so-called own resources).
- The price level of the whole project is a very important criterion for selecting the appropriate way of financing the reconstruction of the property . For the “lower” scale, either mortgage financing is impossible or expensive. On the other hand, in the case of high-priced action, a mortgage is better in most cases.
There are a plethora of types and types of loans on the market. Therefore, it is advisable to leave the choice of the most appropriate to an experienced advisor .
Consumer credit only when there is no other option
For consumer loans, the best solution is not to take them and to avoid them . Their interest rate is too high.
If you do not have another option and you have to choose a consumer loan for your intention, do not take the first offer you get from your home bank, ie from your current account. They usually offer you an interest of about 6-10%.
Get advice from a comprehensive financial advisor who does not represent just one particular institution, but has an overview of all the possibilities of loans and credits that are on the market. This specialist can offer you multiple offers from different institutions , which will compare not only the basic interest rates but also take into account the APRC and the total cost of the loan .
Benefits of meeting with a loan expert
- Non-binding and free consultation
- Find all energy saving options
- Settle administration in one place
- Discuss possible combinations you will save on
- Calculate multiple banking houses for easier orientation without losing your precious time
- Select the bank that best suits your requirements