Is it worth taking out a loan now? Do you need to take out a loan? Or is it better to do it? Advantages and disadvantages of lending
Today, it is possible to acquire the desired material goods at the expense of borrowed bank funds. Insofar as bank loans have become widely available to almost every able-bodied citizen of our country, many of them do not neglect this opportunity. Of course, if you take loans recklessly and inappropriately, you can simply end up in a debt hole. And to prevent this from happening, you need, among other things, to know when it is most profitable to issue a bank loan.
In different periods of time, bank loans become either cheaper or more expensive, this largely depends on the economic situation in the country as a whole. It follows that it is important for each borrower to determine whether it is possible and worthwhile to take out a loan now, or is it better to wait for some time, when the Central Bank of Russia will lower the key rate on short-term loans. This will help the borrower, first of all, to issue a bank loan on favorable terms for themselves and minimize their own risks.
The feasibility of bank lending
The financial services market is full of various kinds of offers. Among other things, due to fierce competition between financial institutions, each bank tries to offer the potential client the most comfortable conditions for cooperation, in order to win their niche, lenders reduce the annual interest on loans and make loans more accessible to the population. Clients, in turn, actively use banking offers and do not even think about the question of whether it is profitable to take a loan now, and in fact, literally after a short time, it will be possible to significantly save on interest payments.
Unfortunately, the big problem of most borrowers is the low level of financial literacy, few people think about the fact that bank loan rates for the population also largely depend on the economic situation in the country. If we characterize the economic situation, then bank lending becomes cheaper for the end consumer when the inflation rate in the country is minimal, it is during this period that the Central Bank reduces the key rate on short-term loans.
Here is a simple example: the last crisis in our country came in 2014 due to sanctions imposed by the United States and the European Union, as well as conflicts in Ukraine. It was this year that the dollar exchange rate sharply increased against the national currency, and banks suspended the issuance of large loans to the population, that is, they suspended housing lending, even the largest banks Sberbank, VTB24, although they did not abandon mortgage lending, but significantly reduced the volume of targeted loans issued loans. This was associated with high risk, when the inflation rate rises and purchasing power is significantly reduced.
Please note that the key rate of the Central Bank changes quite often, so if you are thinking about applying for a bank loan, be sure to check this information, it will not be difficult to find it from open sources on the Internet.
The situation in the credit market in 2018
At the moment, in 2018, the situation in the domestic Russian market has more or less stabilized, although it requires some changes. Indeed, in a few years, Russia managed to overcome pressure from the United States and the European Union, but nevertheless, the financial situation has not reached the level where banks could issue cheaper loans to the population. In fairness, it should be noted that the Central Bank is 100% fulfilling its function and is striving to maintain the inflation rate and reduce the key rate.
Although credit organizations depend on the Central Bank of Russia, they still conduct an internal policy and, on the basis of their own regulations, issue loans to customers. Loan rates have indeed become lower than a few years earlier, and loans have accordingly become more affordable, but not for everyone. Due to the high percentage of insolvency, banks incur losses and are more selective about their customers, first of all, you need to know the basic requirements of credit institutions for customers:
- working age from 21 to retirement;
- a permanent source of income, that is, the client must be registered in accordance with the Labor Code of the Russian Federation;
- positive credit history;
- permanent registration in Russia.
This is the minimum list of bank requirements for a potential client, but at the same time there are additional requirements. For example, credit institutions rarely approve loans to borrowers who work for individual entrepreneurs, and preference is given, on the contrary, to employees of large, preferably state-owned companies.
Please note that it is important for each bank to maintain its business reputation, because if you conduct an ineffective credit policy, that is, approve loans to all applicants, then the bank’s loss grows along with this and it may lose its license at the initiative of the regulatory authority.
When applying for a bank loan, each potential borrower, first of all, should think about the appropriateness of the loan. That is, if the bank offers a high percentage, then it probably makes sense to refuse cooperation. In fact, many borrowers have a chance to get a bank loan, even those who, for one reason or another, do not fit the basic requirements of the bank. But here you need to be prepared for the fact that the bank will tighten the terms of cooperation and offer a higher annual percentage, hence the question arises whether it makes sense to take a loan on unfavorable terms.
It is also worth noting that over the past few years, overdue debt in the bank's loan portfolio has been growing rapidly. This is probably due to the fact that during the crisis many of our fellow citizens found themselves in a difficult financial situation or completely lost their source of income. Therefore, banks are more selective in the selection of applicants. By the way, in the financial services market, you can get a loan only from a bank, but also from microfinance companies, which everyone has probably heard of. True, it is worth considering here that the transaction will be enslaving for the borrower, which means that there is no point in such lending.
How to get a loan correctly
I would like to start with the fact that each client must answer a number of topical questions for himself, which we will give below. But still, you should not abuse borrowed funds, because in any case they are subject to return. The fact is that some borrowers uncontrollably issue bank loans and eventually fall into a debt hole, from which it will be quite difficult to get out later.
So, before you go to the bank you need to answer yourself the following questions:
- Do I need a loan. Sometimes borrowed funds are taken for uncertain needs, that is, the borrower first draws up a loan, and then distributes the borrowed funds. This should not be, if you really have a need for bank funds, then, undoubtedly, here a loan will help solve current material problems, if there are no specific goals, then you should refuse to go to the bank.
- How much to borrow. Before going to the bank, determine the exact amount that you need to meet your current consumer needs; you should not borrow more than you need, for example, to repair an apartment or buy new furniture. Of course, sometimes, in addition to the mandatory ones, you want to realize your other desires, but it is better to do this at your own expense, but non-bank ones.
- Determine how much of the monthly payment you can make towards paying off the loan without compromising your personal consumption needs, it must be reasonable and not burden your budget.
What is the best loan to take today?
Banks offer a wide range of loans for various needs, so the choice of a banking product will largely depend on the goals that you are pursuing. For example, if you want to purchase any goods, then you can choose a non-targeted consumer loan, if you want to buy a car, then the car loan program is ideal for you, if it degenerates in a residential building, then a mortgage is the only way out for you. Therefore, now we will consider which loan is profitable to take today, and which purchase should be postponed until better times.
consumer credit
Here we will consider not only a bank loan for consumer needs, but also plastic cards with a credit limit. It would be advisable to take a consumer loan if you are planning any purchases. Here you need to determine the exact amount of the loan and then only contact the bank. If you wish to make any small expenses or need cash as a financial cushion, then credit cards would be the best option.
If we talk about interest rates, then consumer credit is cheaper for the consumer, especially since today the annual percentage has actually fallen by about 2-3 points compared to previous periods. But on a credit card, interest rates have not changed, which is due to the fact that the bank provides an opportunity to avoid paying interest if you use credit plastic correctly.
Please note that the main problem of every credit card holder is the inability to use the grace period correctly, therefore, before making purchases on a card with a credit limit, be sure to carefully study the terms of service.
Target car loan
If you want to buy your own car, most borrowers study the market for services and offers for car loans. Although today it is not at all advisable to take a car loan, and there are several main reasons for this. First of all, car loan rates are higher than consumer loans. The second reason is that it is almost impossible to get a loan without CASCO insurance, and an expensive policy significantly increases the cost of the loan. Finally, the third reason why you should refuse car loans is the need to make a down payment.
Although in fairness it should be noted that you can get a car on credit, but only under the state subsidy program. Here, the borrowing scheme will look like this: you draw up a bank loan, and part of the overpayment to the bank will be paid at the expense of funds from the Federal budget. True, here the choice of the buyer will be limited by the conditions of the programs.
mortgage loan
Oddly enough, but now is the most comfortable period for obtaining a mortgage loan. First of all, banks have significantly reduced the annual interest on mortgage loans compared to the previous period. The second reason is the decline in real estate prices, so if you are thinking about getting a mortgage, now is the most favorable period for this. Among other things, if the mortgage was issued earlier, then today you can get a loan for refinancing and thus reduce the overpayment.
Please note that banks today are more willing to issue mortgage loans for the reason that, thanks to various government programs, part of the funds is compensated from the state budget.
To summarize, applying for a loan is a strictly individual matter, that is, the borrower must first determine how much he needs borrowed funds, how much he needs, and how he will repay the bank loan. As for interest rates on various loans, the annual percentage has actually decreased by several points for some types of loans, which makes loans more accessible to a wide audience.
Credit can be both useful and harmful if it is not used for its intended purpose or does not fit the person's situation. You can not say that credit is evil. It often happens that you can earn or save your money on it. Especially for Sravni.ru, financial adviser Natalya Smirnova talks about five cases when borrowing is profitable.
1. When inflation is higher than lending rates
Using a loan when the rate of growth in the price of a certain product is higher than the cost of the loan, and the yield on conservative instruments in which you could save up for the desired purchase (for example, deposits) is lower than the price increase. A classic example is use with a grace period, when the bank does not charge interest within the grace period. Or use interest-free installments.
For example, you plan to make a small repair for 200 thousand rubles. within a couple of months. You can either buy all the materials at once with a credit card, or - buy gradually, or - postpone repairs until you have accumulated the required amount. You have been choosing materials for a year and have seen that on average prices grow by 12% per year (i.e. 1% per month). If you pay now, it will be 200 thousand. If you pay 100 thousand now, then in a month you will have to pay 101 thousand. repairs will cost you 201 thousand already. And if you save, then after 2 months the repair will cost you 202 thousand rubles. And if the deposit rate is below 12%, then saving is less profitable for you than buying now. Moreover, if you have these 200 thousand, then it is more profitable for you not to spend them, but to pay with a card, put these 200 thousand at least for 1.5-2 months. (depending on the grace period), and after 1.5-2 months. you will return the bank 200 thousand, and leave yourself the interest on the deposit.
Important: it is difficult to predict price increases more than a year ahead, so this option is only applicable for a short period of several months, and ideally only with a credit card with a grace period, where the cost of borrowed funds is zero.
2. When there is a sharp devaluation
Using a loan in the event of a sharp devaluation of the ruble (more than the cost of borrowing), especially if you want to buy something that is pegged to the rate of a stronger and more stable currency.
For example, you want to go on vacation at the end of the year, and the vacation is not planned in the Russian Federation. You can pay for the trips in advance, but then you will need to take out a loan or use a credit card, or save up so that at the end of the year everything will be paid from your own funds. If it were 2015 and it happened in the summer, then one could assume that in December, which then accounted for the largest payment on external debt in foreign currency, one could expect a drawdown of the ruble. If you saved up on a ruble deposit in the fall of 2015, then in December the amount might not be enough for a vacation, because. the ruble sank more significantly (from summer to December 2015 by 30%) than the percentage on the deposit. If you had taken out a loan in the summer of 2015 and paid off the vouchers in full, you could then repay the loan before the end of the year. The overpayment would be negligible compared to the 30% appreciation of the dollar.
Important: this is a very risky option. You can’t guess with currency fluctuations, so this scenario is ideal only for purchases a couple of months in advance, and the cost of the loan should be minimal, ideally zero (credit card), and you should be 100% sure that you will repay the loan as quickly as possible, and it will not stretch for years with a corresponding overpayment. If you have the necessary amount for the purchase, then you do not need to take a loan. The loan option is only if you do not have the required amount on hand and you are afraid of a sharp depreciation of the currency in which you receive income and save money.
3. When you can make money on interest difference
Using a loan when you can earn more on investment instruments, but at a reasonable risk. For example, I recommended to many of my clients who had loans at the end of 2014 not to repay them, but to place free funds on deposits at 20-22% per annum, which became possible after the increase in the key rate of the Central Bank. Of course, I compared the overpayment on the loan and the total earnings on the deposit, and if it turned out that you could earn more on the deposit, we opened a deposit instead of getting rid of loans.
Important: It is important to understand the risks of investment instruments so that you do not mistakenly consider aggressive instruments to be conservative. For example, so that you do not decide to send all your savings to Forex instead of paying off your mortgage.
4. When a loan is more profitable than rent
Using a loan if it is unrealistic to save up for the necessary purchase within a reasonable time, but it is vital, and the rent is not comparable with the amount of the loan payment for this object. For example, you choose between for 45 thousand rubles / month. and a mortgage for 50 thousand thousand / month. In the case of a lease, you will end up not owning real estate, plus you are not immune from rising rental prices. In the case of a mortgage, the payment is the same for the entire term of the loan (or even decreases) and at the end you have an asset.
Important: you must be sure of the stability of your income and have a serious reserve fund so that during the term of the loan you will not delay and not lose the collateral (the very object for which you took the loan). And yet - the object must be really necessary. Buying an apartment on credit, if you are not sure that you will live in this country in 2-3 years, is not the best idea, because. you overpay on a loan for an asset that you do not need and it is not a fact that its growth in price will cover your overpayment.
5. When a loan is an alternative to selling property
Use of a loan instead of an urgent sale of existing assets when money is urgently needed, if the urgent sale will lead to a depreciation or drawdown of assets greater than an overpayment on borrowed funds.
For example, you have savings of 100 thousand rubles. in cash and 500 thousand rubles. in Russian blue chips. And now you urgently need 300 thousand rubles. Let's remember 2008: from September 2008 to March 2009 the Russian market sank by 80%. Suppose you needed these 300 thousand just in March 2009. Of course, it is more reasonable not to record a loss, but to take borrowed funds, wait for a rebound and repay the loan.
Important: in order to avoid such situations, you need a reserve fund in the amount of 6-12 monthly expenses. Plus, if you take out such a loan, you must be sure that you will be able to repay it over the entire period, because you may not be able to sell assets before the end of the loan term in order to repay it ahead of schedule.
As you can see, there are reservations and clarifications for each item, which once again confirms that there are no unambiguous recipes, everywhere you need to act based on the situation, clearly assessing all the risks associated with using a loan.
Is it worth taking a loan from a bank: an overview of the lending scheme + 10 advantages and disadvantages of applying for a loan + 4 reasons to take a loan + 4 reasons to refuse it.
When it becomes necessary to purchase something expensive or urgently need a large amount of money, the first thing that comes to mind is to get a loan. But before you go to the bank, you need to think carefully, is it worth taking a loan?.
It is necessary to objectively assess the situation, weigh all the pros and cons, analyze your ability to pay, and only then make a decision.
In this article, we will analyze what a loan is, what are its pros and cons, and consider the reasons why it is worth or, conversely, not worth taking a loan.
Scheme of registration and types of credit
Let's start with the definition of credit.
Credit is a financial transaction in which creditor(person lending) undertakes to lend borrower(a person who borrows) a certain amount of money.
In this case, the borrower must repay the amount of the debt, taking into account the interest premium, within the period specified by the lender.
Depending on the purpose for which a person takes a loan, there are such types of them:
- A car loan is a loan to buy a car.
- A home loan is one of the most common loans needed to purchase a home.
- Land - is issued when the borrower intends to buy a land plot.
- Educational– a loan to pay for tuition, usually in higher education institutions.
- Consumer- the most popular today, designed for small expenses of citizens (purchase of equipment and other goods).
All conditions for obtaining a loan and other nuances must be spelled out in loan agreement which is between the lender and the borrower.
The loan agreement usually contains the following terms:
- Debt amount.
- Loan interest rate.
- Amount and frequency of payments.
- The total repayment period.
- in case of breach of contract.
All banks have different offers in the financial services market. But the general scheme for obtaining loans is almost the same and consists of five stages.
These steps may differ depending on the purpose of the loan.
For example, in the Bank of Moscow, you can independently make an application and fill out a questionnaire. You just follow the link to the site ( https://anketa.bm.ru/kredit_nalichnimi) and choose the conditions you need (amount of money, payment period).
After that, you fill out a questionnaire with your personal data and wait for the bank to consider the application. Typically, this is about 15 minutes.
So you can find out without even leaving your home.
Advantages and disadvantages of lending
1) Benefits of obtaining loans: 5 pros
You can borrow money at any time you need.
In life, there are often situations when money is urgently needed, but there is none.
At such a moment, a loan can literally save you, especially if you do not have friends or relatives who could help out.
A loan will allow you to purchase the necessary expensive thing now, and not after a long period of time.
This applies mainly to household appliances. If your refrigerator or air conditioner breaks down in the summer, the bank will help solve the problem.
You can also purchase a computer for work if you need it urgently.
You will have the opportunity to purchase your own home.
In our time, it is financially difficult to purchase housing immediately.
It is much more rational to get a mortgage and live quietly, rather than spend your whole life in rented apartments.
You can take out a loan to organize your business.
If you want to do what you love and start your own small business, it is advisable to take out a loan.
So you can increase your earnings and pay off your debt faster.
With the help of a loan, you will feel like a free person.
When you have additional capital, more opportunities will appear.
You can take, for example, a car loan and buy a car that will generate income (as an option - delivering pizza or sushi, and making money on it).
In short, loans have many advantages. But it is not for nothing that many people are afraid of living in debt. And not in vain!
2) Disadvantages of concluding loan agreements: 5 “against”
Waste of time on paperwork.
In order to collect all the documents necessary for the bank, you will have to spend time.
And there is no guarantee that the bank will make a positive decision on granting you a loan.
Availability of interest rates.
Whatever the interest rate, you still have to pay back more than you borrowed.
Deceptive bank offers.
Many banks, in order to attract customers, promise them loans without paying interest.
But they are silent that even if you do not pay an interest rate, you need to pay for banking services (about 3% of the loan amount) and a down payment (up to 15% of the amount).
Calculation of fines and penalties.
If you are a little late on payments or could not repay the loan amount before the end of the loan period, the bank will charge you a fine and it will be even more difficult to pay off the debt.
Risk of losing everything.
Life is unpredictable and anything can happen - you can lose your job or get sick.
And it is unlikely that the bank will be interested in your situation and will give you a delay.
Everything is clear with the pros and cons, but how can you still determine whether you need a loan or not?
Let's review the most rational reasons, with the help of which you can easily understand whether it is worth taking a loan.
4 reasons to apply for a loan
Reason #1. Desire to get back on your feet.
This goal is pursued by almost all young people in modern society. Many want to quickly build their lives, achieve success and become independent.
But in the conditions of our time, it is very difficult for ordinary students to do this.
Then a loan is a good option in order to gain freedom. But, of course, only if you are a financially literate person and can calculate your strength rationally. It is very important in such a situation not to fall into a debt hole.
If you are young and full of ideas, you can use a loan to increase your income or improve your living conditions, thereby becoming independent.
A loan is worth taking in this case:
- On housing to get the freedom of space.
- For a car that can become your source of income (if you convert it into a coffee car or for another).
- For training, then to get a decent education, work and, accordingly, a standard of living.
The main thing in striving to become independent is to be reasonable, and not be led by emotions. Then this type of loan will justify itself.
Reason number 2. Eagerness to start your own business.
If you are already ripe in your life to create your own business, and are ready to work hard to achieve success, a loan is what you need.
Due to progress in all areas of life, every day people have more and more business ideas that are unique in nature. And since these ideas are mainly developed among the younger generation, the first problem for starting a business is the lack of capital.
In such cases, lending is a viable solution.
But here, too, you need to be careful. And if you decide to take out a loan to open your own business, do not forget:
- In advance, to know how much money and for how long you need to borrow.
- Calculate the profitability of your business in order to be able to repay the debt in the future.
Well thought out business idea.
You must be sure that there is a demand in the market for such goods or services.
If you carefully approach the formation of your business project in advance, you will most likely be able to make a rational decision.
Reason number 3. Desire to move up the career ladder.
Let's say you have the opportunity to change jobs or get promoted, but to do so you need to work from home more and get a good computer or laptop that you can't afford.
The way out is to take out a loan. Of course, if you can pay it.
Many will say that this is stupid, because it is better to save money for the purchase of such equipment than to go into debt. But it is not so. If the device is needed right now, and during the period during which you will save money, you can already achieve success, then, for sure, it is better not to miss such a chance.
But it's up to you, because only you can determine your ability to pay. Weigh well all the pros and cons, calculate whether the loan will justify itself, and only then draw a conclusion.
Reason number 4. The need to purchase housing.
Taking out a home loan or mortgage is the most popular reason to go into debt. After all, you must admit that in order to buy equipment you can still save up, but in order to buy an apartment, it will take too long to save up.
Again, getting a mortgage is a serious matter, so it's best to take out a loan if there are really very good circumstances for this.
Reasons to take out a home loan can be:
- Expanding your family- if living with other relatives causes discomfort, of course, it is better to move out.
Creating a family - young people, as a rule, do not have much money to buy their own home.
But if you can afford to borrow, it's worth a try.
Getting a job in another city You may have been promoted and need to move.
For such a case, a mortgage is a rational solution if the new job will bring a solid income.
As you can see, the reason is really weighty, but only if you are ready for a long debt repayment.
Actually, there are really justified goals for which a loan is a way to start a new, better life. But every medal has two sides, so we will also discuss the reasons why lending should be abandoned.
4 reasons to refuse a loan
Reason #1. Unforeseen circumstances.
None of us can know for sure what the near future holds. Perhaps someone will be lucky, and someone may face force majeure.
In this case, the latter are:
- Dismissal from work.
- Loss of property.
- Deterioration of health.
These are the main unforeseen situations that can overtake anyone. As a result - the inability to repay the debt on the loan and the debt hole.
Of course, you can’t think only about the bad, but these factors should be taken into account. Especially if you are not confident in your ability to repay the loan amount.
Reason number 2. Insufficient solvency.
Experts recommend taking out a loan only if, in addition to the main source of income, you have some additional material savings. These same savings should be at least equal to your salary for 3 months.
Only in this case, professionals assure, you can be at least a little insured against force majeure situations. If you do not have such savings, then you should not tempt fate.
An exception can only be unpredictable situations, for example, if you urgently need money for an operation or treatment.
Reason number 3. The unreliability of banks.
Someone thinks that banks are the only reliable institution where you can. Others are convinced otherwise.
There are many unpleasant situations that can happen while you pay off the loan amount:
- The bank may go bankrupt.
- The bank may raise the interest rate.
- The collapse of the currency is possible.
Whichever of the above happens, you could lose your money, or at least overpay too much. Therefore, to apply for a loan, you should choose only proven, reliable banks.
You can find information about the best institutions here: https://www.banki.ru/banks/ratings
And do not forget to take into account the economic situation in the country at the time of lending.
Reason number 4. The desire to be "like everyone else."
Despite the fact that the majority of people in our country are educated and progressive, very often people are too susceptible to public opinion and strive to be "like everyone else."
This very opinion often pushes the population to take loans, which, in the end, will not lead to anything good.
People succumb to emotions, strive to live the life that, unfortunately, is not yet available to them. Most people want to be like on the cover of a magazine. As a result, they are up to their ears in debt.
But think twice, weigh all the arguments and make the right decision. Don't let the majority opinion drive you to do stupid things.
So still, is it worth taking a loan, and if so, for what exactly?
This video will help you make the right decision!
Whatever the case, the final decision is it worth taking a loan, is up to you. It is impossible to answer unequivocally whether a loan is good or bad. It all depends on a lot of circumstances.
And if in your life, a situation has happened that, as you think, forces you to take a loan, do not rush to conclusions. Think again, weigh the pros and cons, consult with your loved ones and only then decide whether or not to take a loan.
Useful article? Don't miss out on new ones!
Enter your e-mail and receive new articles by mail
Advertising of banking services can be seen everywhere: on TV, on the Internet, on billboards and brochures. Goods on credit can be issued immediately in the store. Such a loan is presented as an objective opportunity for a bargain purchase, such a lifesaver. For a minimal fee, buy whatever you want. Such availability of loans leads to rash actions. Without analyzing the consequences, we collect several loans.
Cold calculation
It is difficult not to succumb to the temptation of intrusive advertising, if, in addition, you personally received a call and offered to take a loan. The conversation boils down to the fact that you have been pre-approved for a loan, and they will fill out the application themselves, you need a minimum of documents and even without collateral. The interest on the loan from "...%" is nothing at all, and the monthly payment is very comfortable. How to refuse such an easy and affordable loan. What if this offer no longer exists? And if, even giving consent, you wanted to refinance another loan, because the percentage is much lower. In reality, a completely different interest rate awaits you at the bank, as it is calculated individually. It is possible that the amount you are asking for is much less.
Listen to the conditions and ask to reschedule the conversation for another time, for the reason: there are no documents with you or you need to think. Next, a calculator to help you and common sense, real income minus expenses. If in the end there are finances for the "airbag". And you are confident in the stability of your income from a permanent job, then of course you can.
When "finances sing romances", there is a chance to get into a debt hole. Refuse credit
Of course, things happen in life. Money is needed very urgently, and friends and relatives are not able to help, you have to take a loan.
Good reasons to take out a loan
- The situation when the “workhorse” laptop gave you a “surprise” burned out. Where to go, of course, to take a loan if there is no money. Thanks to a laptop, you get a salary or additional income, and you can’t do without it.
- Or the smartphone is completely broken and cannot be repaired. Nowadays, communication is impossible.
- Thoughtful opening of a business (calculated business plan).
- Urgently needed treatment;
- Acquisition of an apartment;
- Buying a car (as a means of earning money, or a vital necessity);
- Additional education (opportunity to get a well-paid job).
When choosing a source of financing, you can get confused about which loan to choose.
Consumer is the most popular, it can be targeted and non-targeted, collateral and without collateral.
It is best to contact the bank through which you receive wages. The interest rate for payroll clients is from 9%. The bank has more confidence in such clients, and therefore they can offer special conditions for lending. Take advantage of this opportunity. A non-payroll client will not be offered such privileges. And the interest rate is usually close to the maximum.
Non-purpose loans:
Emergency loan, credit cards.
The size of such a loan is usually not large, and interest rates are high. The bank has no information on what the funds will be spent on and for this reason the bank does not want to take risks. Since there is a high risk that the client simply will not return the money. Passport is the main document for granting a non-purpose loan.
Loans that are issued for specific purposes, with collateral or under surety. The pledge can be: an apartment, a car, securities, precious metals.
When applying for a loan, all the details of the collateral are prescribed in the agreement. The cost, the actual location of the apartment or car, and other information. If it turned out that the client could not pay the loan in full or in part, then the credit institution sells the collateral (car, apartment, and so on).
Loans under guarantee
A guarantee increases the likelihood of loan approval and the interest rate is more profitable.
Without collateral
The loan is issued without collateral and guarantee.
Some banks advertise the service of issuing a loan without collateral in the amount of up to a million rubles. In fact, such a loan is unrealistic to obtain. Those who receive a salary in this bank and have a good credit history have such a chance.
Buying an apartment, cottage or cottage on credit. You can buy an apartment in a new building or on the secondary housing market, with a down payment of 10% of the mortgage amount.
The mortgaged apartment or the apartment that you have remains as a pledge to the bank.
With a car loan, you can buy a new or used car. In some banks, they will require you to insure a car under CASCO and take out life insurance. There are credit organizations where CASCO is optional. It is not uncommon to offer a car loan without a down payment and certificates: for new or used cars;
for cars of Russian and foreign production.
Two documents are required for registration.
Credit cards
If you do not have cash with you to purchase, you can purchase goods with a card at any time. And pay for the amount spent later. Many banks provide a grace period of 50 to 100 days to repay the debt. It is also convenient to use the card if you need to “borrow” before the salary. The main thing is to return the money spent during the grace period, then interest is not charged. If you do not pay the loan on time, you will end up with a decent amount of debt, since the interest on credit cards is high.
- Getting the desired product here and now. And you don’t have to wait long when you finally save money. Moreover, prices are only rising, as long as you save up, this product will cost more.
- Monthly payments are minimal. In comparison, if you immediately give the entire cost for the goods. This greatly knocks out the family budget from a stable position.
- Payback of monthly payments on a loan due to income received from renting a car bought on credit. Or you yourself work on it, and as a result of this activity, the cost of loan payments is compensated several times.
Cons of loans
- Significant loan repayment. This becomes apparent if you recalculate the total amount of payments. And we will see a significant difference in the total amount for the loan and the amount if the goods are bought immediately for the full price.
- The overpayment increases in case of delays in payments. If the payment is delayed, you will have to pay a fine. The measure is one-time and in each bank, the size of the fine is different. In one there will be a fixed amount of the fine, for example, five hundred rubles for each delay. In another bank, the penalty is increasing, for example, five hundred rubles for the first delay, six hundred rubles for the second, eight hundred rubles for the third. Loan repayment delays are costly. As a result, the goods purchased on credit will turn out to be several times more expensive than the actual cost.
- If it is not possible to pay the monthly payment on time, in addition to a fine from the next day, penalties are charged. The maximum size depends on the "greed" of the bank.
- To all these nuances, the daily interest rate is added, due to late payment on the loan. Significantly increases the amount of interest, as a result of delay.
What happens if there is a delay in payment
Banks are required to submit delinquency data to credit bureaus twice a week. As a result, other banks may well refuse to issue a loan due to bad credit history.
Don't forget to pay on time
To get you to make a payment sooner, the bank starts to do this:
- send SMS messages
- call
- write letters
In the event that these measures have not changed the situation with payments, and approximately two or three months have passed. Lenders forward the data to the collection agency. And then the "fun" life begins. They don't stand on ceremony. Everyone knows such stories. Of course, each lender has its own rules with these agencies. In any case, try not to forget about payments so as not to get acquainted with collectors. You won’t wish such “joys of life” to anyone.
New in law
Amendments to the law came into force when applying for a consumer loan up to one year. Now, for new loans, starting from January 28, 2019, the rate is not higher than 1.5% per day. Further, the maximum interest rate will decrease to 1% from July.
Since our population is indebted, they want to introduce restrictions. Since the fall of 2019, around October, banks are required to calculate the client's debt load for a loan of 10,000 rubles or more. Accordingly, getting a loan will be more difficult.
Based on the above, everyone decides for himself whether to take a loan or not.
Comments Rating 0 (0 reviews)
Some people are afraid of loans, and they never dare to contact them. Others, on the contrary, seem to be obsessed with "credit mania".
The first type of people are people who are very cautious, not sociable and shy. Such a person, even if he has the opportunity to take a loan and with a guarantee to repay it ahead of schedule, he will never take such a step. He is ready for years and even decades for an apartment or a car, just not to mess with loans for anything.
But the second type is optimists, open and sociable people who don’t particularly “steam” about possible risks and problems. “I live now, and tomorrow will come tomorrow, somehow I will burst into tears ...” Such a position is very dangerous. A person runs the risk of amassing a lot of problems and becoming a chronic debtor.
Both of the above cases are extremes and they will not lead to anything good. So what to do in this case? When can you still get a loan?
If over the past few years, wealth has grown, even in small steps, then you can easily afford to take out a loan. In this case, with a high degree of probability, you will be able to pay it off without much damage. By taking out a loan, you deliberately limit yourself in spending. So you must take this step consciously and without regret. Otherwise, you may later regret what you did.
But if your material well-being has recently remained unchanged or even worsened, here you should think hard: “Is it worth it?” Credit is not a panacea for solving money problems. Rather, it is an attempt to move to a higher level of material wealth. And for this you must stand firmly on the previous one. You should have funds for the essentials: what to eat, what to wear, how to pay for housing and more.
Many users of loans are worried about the same question: “What if I suddenly cannot repay the loan for one reason or another (for example, if I lose my job),?” What can be said here? If the country's economic and political components of life are stable, then you shouldn't worry too much. You are a responsible person and have full awareness of what you are doing. So right? This will partly serve as a guarantee that the material income necessary to repay the loan will find you. It does not matter at all whether you repay the loan in a year, as planned, or in several years. It is only important that your financial well-being be more or less at the same level or even grow.
And finally, I would like to draw your attention to the esoteric point of view on this issue. Follow the signs of fate. If you apply to banks for a loan, and you are constantly denied, then this is not a very good warning. First refusal, second, third, fourth... Stop... stop, no need to break through the closed door. Most likely, even if you manage to get a loan, you will be greatly disappointed later.
I wish you good luck in all credit transactions, and even better, such prosperity, in which even the thought of loans will not arise!