One of the key points that you need to understand before submitting a loan application is the definition of its objectives. The type of loan and, accordingly, the conditions for its provision directly depend on this. In this regard, credit products are divided into two groups – targeted and non-targeted. The first of them are in fairly high demand and, as a rule, are more profitable for borrowers since banks take into account the nuances of the transaction and are ready to select a program on individual terms for a specific client.
Things to Pay Attention Before Applying for a Loan
Before concluding a deal with a bank, it is recommended to pay attention to a number of important aspects. The most significant is the effective rate and the amount of the overpayment.
The list of other nuances affecting the profitability of a loan for a borrower includes:
- the possibility of debt restructuring, allowing for a change in terms, payment schedule, reduction of commission;
- no need for compulsory surety and documentary evidence of the level of income;
- the possibility of early repayment of the loan without charging a fine and without restrictions on the amount and terms;
- the absence of collateral, which in case of non-payment of the debt becomes the property of the bank;
- identity of the credit currency with the one in which the borrower receives income;
- the degree of loyalty to the accrual of penalties for late payments.
When you Get a Loan $1 – $999, it also makes sense to pay attention to the availability of insurance. Such a policy is inexpensive, but it can reduce risks. The clauses of the contract, marked with an asterisk and written in small print, deserve careful study. They may contain veiled provisions, according to which the terms of the loan, in reality, are not as favorable as it was stated in the advertising of the product. For example, hidden fees are often masked.
Nuances of Insurance
According to the current legislation, insurance is a voluntary service, not obligatory when receiving loans. Knowing this aspect, many credit and financial organizations have already learned how to “hide” the registration directly into the contract.
This leads to many clients receiving a loan agreement to take out insurance without knowing it. Therefore, it is recommended to study the insurance issues immediately carefully. If you have a similar situation, then remember that there is a “cooling period,” which, however, does not apply to all types of voluntary insurance.
Some lending institutions, when issuing borrowed funds, offer to use additional banking products. Be sure to study all aspects of their provision carefully. Sometimes “bonuses” have too unfavorable conditions for the client, so it is worth clarifying all points in advance.
Loan Repayment Commission
This aspect concerns the possibility of early repayment of the loan. Remember that banks do not have the right to charge additional fines and sanctions for this. The client can repay the loan in part or in full at any time. In some cases, it is necessary to inform the financial institution in advance about this.
Thus, the most important document in the provision of borrowed funds is the loan agreement. This paper is an agreement between the lender (banking organization) and the borrower. Legal relations are governed by the Civil Code of the Russian Federation.
According to the legislation, there is no clearly established pattern. Thus, each credit institution has the right to develop its own standard agreement, which must comply with regulations. You can also find important information for yourself at American Economic Association.
By signing a loan agreement, a person takes responsibility and guarantees that he will fulfill his obligations. Therefore, the study of securities should be approached very carefully.