Consumer loans are the most demanded in the market because they can be used to buy a wide range of goods and services. These loans can also be targeted to provide fresh money and pool existing existing loan commitments. They can be taken from bank and non-bank loan institutions, depending on the terms demanded by the borrower. These loan products include the so-called targeted loans with a certain focus, e.g. retirees, students, freelancers, people with higher incomes, etc.
The main things that borrowers need to know about consumer loans are outlined below.
- How do I estimate the consumer loan cost?
In fact, this information is given by the annual percentage rate of charge rather than by the interest rate. The so-called APR includes all types of application, management, and repayment costs, so you can compare different loan offerings if you have more than one option. loan organizations are therefore obliged to provide the APR for the loans they provide as pre-information.
- How do I choose the term of the loan?
In general, banking organizations have more flexible lending schemes for types of loan compared to non-bank loan organizations. However, the principle is the same – the shorter the period for repayment of the loan, the cheaper the loan for you. However, if the repayment installment is too high and you can not afford it, then you may be able to opt for a longer term repayment but with a lower installment.
- Can I get my loan information before signing the contract?
Banks are required to provide pre-contractual information, which describes the main parameters of the loan. As a minimum, this document must contain the APR, the amount of the monthly installments and the total amount of the loan. Many non-bank loan institutions have also introduced such a practice.
- What is important to follow in the loan agreement?
Beyond the basic loan information we described above, it is important to get information about a few more details around your loan. First of all, this is the requirement of the loan institution when the loan is not repaid. Basically, there are two options: to make the loan pre-term due or to change the conditions seriously and make it much more expensive for you than your original option. This information is contained either in the contract or on the website of the respective loan company (the latter applies to non-bank loan organizations). The other major detail that we need to track about our loan is if we are to pay any additional charges if we repay early.