When seeking financial support, we usually decide to take out a loan. Housing and consumer loans are the most popular. Among the latter, cash, car, student and other loans are taken. In turn, entrepreneurs use working capital loans and investment loans. However, there are so many banking products that it is easy to get lost, especially if you do not have much knowledge in banking and finance. One of the issues that raises the most questions is the actual cost of the loan.
Real loan costs
The actual cost of the loan is primarily interest, as well as other fees and commissions. We usually pay the most attention to interest when taking out a loan. The loan interest rate is set by the bank and is expressed as an annual interest rate. Pursuant to the provisions, the interest may not exceed four times the lombard rate, its amount is decided by the National Bank of Poland. Added to this are credit insurance costs. The insurance does not apply to all loans, it is most often found in the case of housing loans as insurance for missing own contribution. The cost of insurance can often be renegotiated after the first years of loan repayment.
The actual costs of the loan also include additional costs such as the preparation fee, i.e. the amount for examining the application, as well as the commission for granting the loan. The commission can be added to the loan amount, thanks to which the borrower does not have to incur this one-time fee when taking out the loan, thus reducing the initial costs. The cost of a housing loan can also include the cost of property valuation, although sometimes a bank evaluates a property at its own expense. The real costs of the loan do not include account maintenance fees, costs associated with securing the loan, or all fees resulting from default on the loan agreement.
What affects the cost of the loan?
The loan interest rate as well as any additional costs result from many factors. Some are dependent on us, others are beyond our control. Such elements include loan collateral provided by the borrower, as well as its credibility. If the bank’s customer has a high credit rating, he is more likely to negotiate terms and reduce at least part of the costs. In addition, credit costs are affected by such elements as inflation, unemployment, competition among banks and financial companies, interest rates and many others.
How do you check the actual loan costs?
At the stage of comparing the offers of individual banks, calculators that calculate the total cost of the loan will help us. Such calculators can be easily found on the internet. Of course, the amounts they calculate are indicative and not fully accurate. Ultimately, when deciding to submit a loan application, you must ask your credit advisor very carefully about all the costs. It happens not once that the bank employees do not mention some fees, so it is worth being very inquisitive. Taking a loan for a very large amount, e.g. a mortgage, you can ask for help from a lawyer who specializes in finance and banking. Such a lawyer will analyze the available options and tell us what solutions will be most advantageous.