If earlier the main part of the population in ourthe country lived from paycheck to paycheck, today many have to live from one loan payment date to the next. That is, the terms have changed, but the amount has remained the same. And during the next financial analysis of the family budget, someone clutches their head in horror, asking the only question - "where did the money go?" Sometimes this question arises so acutely that you involuntarily wonder: is it such a blessing - living on credit? Like most important decisions, one way or another associated with financial risk, the intention to take out a loan - the pros and cons are not always recognizable at first glance - requires a thoughtful approach.
Consumer credit - is it evil or good?
Consumer credit has become a common occurrencein our everyday life. At first glance, it consists of solid advantages. You get the thing you want today, and not when you can save up money for it. And if you consider that many consumer loans are interest-free, your head will spin from such an abundance of benefits. But is it really that simple? Before getting into the debt hole of a consumer loan, let's try to get to know this positive type of lending in detail. Let's start with the most obvious benefit - the absence of interest on the loan. This is the first thing that buyers come across, without thinking about the fact that no bank will ever work without profit. So let's see what your interest-free loan consists of. Commission for registration. Despite the fact that it is charged once, its amount can reach an average of 20-25% of the loan amount. Payment for loan servicing will be about 1-3% of the amount. And it is paid monthly for the entire period for which you were given your not so interest-free loan. And keep in mind that the service fee is not charged from the remainder of your debt, but from the amount you initially borrowed. This means that your debt is reduced, and you pay for the service as if you had just taken out a loan, from the original amount. Insurance. If the amount of your loan is large enough, the bank may well require you to insure your life or health. Most often, you will be offered an insurance company right there, and if you inquire, you will probably find out that the shareholder or founder of the insurance company is the very bank from which you are going to take out a loan. If you add up all these payments and distribute them over the term of the loan, it turns out that every month you give the bank from 12 to 36% over the cost of the goods you took out on credit. And this is just a simple financial calculation, ordinary arithmetic. And if you add in the psychological factor and the influence of numerous advertisements, then the goods you bought on credit will most likely be much more modern and sophisticated than the one you originally intended to buy. After all, you bought it under the magical influence of those zero percent. But if you couldn't afford the item at one hundred percent of its value in the first place, then what's the point of paying one hundred and fifty percent for it? Are you really that rich?
Cash loans and plastic cards
Let's look at cash loans:Pros and cons from the borrower's point of view. The undoubted advantage is that in unforeseen circumstances you can always get the amount of money you need without burdening your friends or family with your problems. This is where the positive features end and the negative ones begin. If you take a cash loan from a bank, you will need to provide the bank with many documents. Starting from a certificate of income from work and ending, if you take a large sum of money, with documents on the property you own. And if you remember that banks prefer to get as many guarantees of money return as possible, then guarantors may also be required. This is what concerns the fuss and collection of documents. Further, cash loans are given at interest, and each bank has its own interest rate. In addition (usually this information is not indicated in advertising brochures, but it is better for you to know everything in advance), the bank will charge you a commission for maintaining your account, it will be plus 2-3% to the basic interest rate. It is also worth paying attention to the fact that the agreement may contain a clause on the bank's right to revise the interest rate on the loan unilaterally. And it is not a fact that it will be revised in your favor. So, if you are forced by chance to contact the bank for a cash loan, consult a specialist and carefully choose the bank. All kinds of plastic cards imposed by banks are also one of the ways to fall into a credit trap. And if you still decide to take advantage of such an offer from the bank, keep in mind that it is better to pay for goods directly with such a credit card. In this case, in addition to the interest rate specified by the bank and the amount of the commission for opening an account, you will not have to pay for cashing out money. But if you need cash, then be prepared to pay an additional 1-3% of the amount of money received from the ATM.
Mortgage - good?
Perhaps the only type of lending thatwith some reservations can be called a benefit - this is mortgage lending. Agree, it is one thing to save money for a TV, washing machine, car or refrigerator, and quite another to save money to buy a home. What should you pay attention to when choosing a mortgage lending program.
- Timing. Too small a loan term will significantly increase the burden on your family's financial budget. But at the same time, the longer the period for which you took the loan, the more interest on the loan you will pay. Try to observe the rule of the golden mean.
- Currency. The choice of the currency in which you will pay the loan depends on the currency in which you receive the salary. If you are given a salary in dollars, then take the best dollar loan to avoid unnecessary costs when converting currency.
- Terms of early repayment. For example, you suddenly got lucky, and you got an inheritance or you were promoted. Now you can pay a large loan per month or you can pay off the balance immediately. In the contract there must be an item that allows you to do this.
- The interest rate on a mortgage. Currently, on average, it is 10.3% per annum in dollars and 11% in rubles. If we take into account that over the past year, house prices have increased by an average of 25%, the benefits are quite obvious. It turns out that you "frozen" the price of your housing relative to the value at the time of the conclusion of the contract.
The bank where you take out a loan is requiredwill check the legality of the transaction, check the housing you are going to buy, and also ask you to arrange insurance for it. While you are paying off the loan, your housing is pledged to the bank. Therefore, the bank is interested in your home not having another owner, and you not becoming a victim of fraudsters. Having considered all the pros and cons of the loan offered to you by the bank, having clearly calculated your own capabilities, you can safely enter into a mortgage loan agreement. Today, even experts consider this type of life on credit to be the most painless. You are not throwing money down the drain, paying tribute to fashion or the buying instinct, but buying real estate for which you will not be so sorry to pay off the debts. When planning to take out a loan, remember the well-known proverb: "A miser pays twice, and a fool pays thrice." Therefore, do not buy into advertisements about the benefits of an interest-free loan. Money, as we know, loves to be counted, and we can only hope that this article will help you understand how beneficial a loan is for you personally.
