Lower installment, but a cheaper loan?

Lower installment, but a cheaper loan?

Increasingly, additional costs decide about this, the calculation of which is no longer so simple. For this, a calculator and knowledge of basic arithmetic operations are not enough. What do you need to know about banking mechanisms to choose the best option? You have to start counting differently!

Commission for granting a loan, commission for early repayment or conversion - these are the costs that must be borne by those who buy an apartment on credit.

They significantly increase the sum of all expenses related to their incurring

They significantly increase the sum of all expenses related to their incurring

Good Finance experts checked the level at which these additional loan costs are currently at individual banks. It turns out that the lowest monthly installment does not always mean that we have found the cheapest loan.

When preparing the analysis of 22 banks' offers, it was assumed that the borrower intends to buy a flat worth USD 300,000. USD and needs 240 thousand for them credit, so it has a 20% own contribution, which increases the number of offers available to him in banks. The loan is to be taken in USD, for 30 years and repaid in equal installments.

In the group of banks surveyed, 13 do not currently charge a commission for granting a loan. Often, however, these are promotional conditions that can change at any time.

In banks where you have to pay the commission

bank

It ranges from 2 to 3.5%. We pay the highest at Bank Good Credit (USD 8,400). However, you can reduce your commission if you take out life insurance or lose your job. A similar situation will be faced by clients, Who will not pay a commission for granting a loan by purchasing insurance against losing their job for a period of 4 years.

Another significant cost that is worth paying attention to is the commission for early repayment of the loan. Currently, the standard on the market is downloading from 1 to 3 percent. overpaid amount.

The fee for currency conversion of a loan is also a cost of 1-2%, however in this case many banks do not expect commission from customers. Some of them, however, don't even give you that opportunity.

In the case of currency conversion of the loan

In the case of currency conversion of the loan

It must be remembered that the bank will recalculate the loan amount at its purchase rate, and then the customer will pay the installments at the sale rate.

This means an increase in the outstanding loan amount by the amount of currency spread, which today, depending on the bank and currency ranges from 5 to 11%. Of course, with the right exchange rate for a given currency, such an operation can be profitable anyway, '' Good Finance expert.

According to Good Finance calculations, we will pay the lowest installment today. It will amount to USD 1,303 with a margin of less than 1%. However, the bank will collect a commission from the client for granting the loan, i.e. in the discussed simulation it will amount to USD 3,600. In addition, we must remember that if we want to make an earlier repayment, the bank will charge another 2% of the repaid amount as a commission.

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