Growing income means that we do not want to wait for certain goods. We want them faster, which is why we are eager to reach for credit products that allow us to buy them right away. Bank offers are more often used for loans, and saving is put aside. And what do we look like against the background of Europe? What do we know about loans?
LOAN COSTS – all costs to be incurred: commissions, fees, margins, interest, taxes, other costs, e.g. insurance.
APRC – Actual Annual Interest Rate, i.e. the total cost of the loan expressed as a percentage on an annual basis, must always be clearly stated in the contract.
INTEREST RATE – price for money borrowed, financial benefit that the bank receives.
BANK MARGIN – the value that a bank earns by granting a loan, the profit obtained from the sale of a given product, can be expressed as a percentage or a percentage.
COMMISSION – fee charged for granting a loan.
PREPARATION FEE – fees for activities related to the preparation of credit documents.
LOAN INSTALLMENT – the amount to be paid in each month to pay the debt.
LOAN PERIOD – the time counted from the moment of concluding the contract to the day of full repayment of the liability, the time for which the loan was granted.
CREDIT ABILITY – ability to pay back the debt.
WITHDRAWAL – suspension period.
LOAN AGREEMENT – a document that contains the most important information about the loan: loan duration, amount of funds transferred, specific loan objectives, consent to repay the loan with interest within the deadline set by the repayment schedule.
Polish debt and their knowledge of finances
The debt of Poles, although growing year by year, is still one of the lowest in Europe. According to the InfoKREDYT report published by the Polish Bank Association, household debt has increased threefold over the past 10 years and amounts to approximately PLN 22,000 per one person, yet we are far from the European leaders.
The report also tells us that nearly 44% of Poles poorly assess their knowledge of loans and advances. What’s worse, only 9% of respondents assess the level of information on this topic as good or very good. If you compare age and state of knowledge about economics, then the worst are people between 18 and 34 years old and those over 65. The situation is similar in the case of rural residents. Nearly 60% of respondents in these groups know very little about finances. Do you know what credit is?
Are you sure you need this loan?
Loans are for people. You can’t demonize them, but you have to remember some things. Money from a loan is a way to fill a hole in your home budget, which can be the result of temporary difficulties or breakdowns, e.g. household appliances, collisions, etc. It is also an opportunity to quickly realize the dreams or needs set aside. Before you reach for money from the bank, remember that your financial situation may change. Make such commitments that even in the face of temporary troubles (job loss, illness) you will be able to pay back.
What rules should be followed to bypass the hooks in cash loans?
- Plan your home budget, thanks to which you will find out what amount you need, what part of your salary remains, which will allow you to see how much you will be able to pay off.
- Compare offers. Impulse action is not a good option. Regardless of how nice the actor looks in your ad and how he inspires your trust.
- Check the costs. Each loan has its price, which consists of many elements. Also verify that the cost of the same product, but not in the promotion is not the same or even lower.
- Additional fees, always check whether consideration of the application is payable, whether the bank “forces” you to open an additional personal account, card, insurance. Each of these services will generate additional costs in the future.
- Don’t be afraid to negotiate. You won’t lose anything and you can gain.
- Before you sign anything, ask to send an offer by email.
- Check the total cost of the loan.
- Think about whether the thing you want to borrow is definitely here and now. Wouldn’t it be better to wait some time and put down this money.
If you made a profit and loss balance, you are convinced that credit is just a product for you, check what elements you should be careful not to overpay.