How to decide which bank is better to take a loan

The author of this article works in one of the largest European banks, widely distributed in the territory of Russia. I am well acquainted with the specifics of financial services, in particular, with loans and credit cards. This article will not advertise specific companies, however, you will find useful tips that will help you determine which bank is better to take out a loan.

What is credit? We will not refer to dictionaries and methodological aids for the bank's employees for a clear definition. Let's just note that a loan is a financial service for which you have to pay. You pay the hairdresser for what he does to you haircut. Pay to the travel agency for the offered vouchers and issued visas. And pay the bank for giving you money right now. Of course, you could save this money yourself. You could wait six months, a year or a couple of years. However, this is not always justified: sometimes it's better to overpay, but to get the desired thing in the very near future. For example, you have a broken TV. You could save up for a new TV set in six months, but it's better to take a loan from a bank and live these six months with the necessary comfort. And some life spheres - medicine, education, important events of your life - can not wait. And then you have to pay attention to the financial services market and decide which bank it is better to take out a loan.

Free cheese is only in mousetraps. Each bank should receive a loan with a loan. Agree, no bank could have existed if it had not received a solid interest from its customers. However, not all such enterprises operate completely openly. In some cases, you may face unforeseen costs.

How to understand which bank is better to take a loan?

First, apply only to large world banks with a solid client base. On well-known Internet portals you can get acquainted with the rating of banks, find out how many clients they have, how many years they work in the market. In reliable large institutions are served by 20 million customers. If the company appeared on the market relatively recently - you are very risky, making out a loan in it. However, the difference between two large banks with a client base of 20 and 30 million customers is almost no, look at the current tariffs, and not on the bank itself. Tariffs in such institutions are constantly changing, so the company that offered the minimum rate last year may be quite expensive given the situation this year.

Secondly, find out if the bank takes a commission for servicing over interest on the loan. Today this is rare, but be sure to clarify this point. Some banks withdraw money from their clients for servicing the card to which the loan was transferred. With you may require additional funds for insurance, for the service of sms-alerts and much more. To free yourself from surprises, ask the specialist who is making out the loan what exact amount you will have to pay taking into account all the additional expenses. An employee of a well-known bank will not be able to hide the truth from you.

Thirdly, find out whether your tariff allows for early repayment. Having repaid the loan ahead of time, you will significantly reduce the overpayment, saving on extra percentages. Always try to pay the loan early - in parts or completely. This will be a very profitable operation for you. However, before you transfer a larger amount to your account, call your bank. You will probably have to first write a statement to convert the interest.

Fourth, ask for your overpayment before you get a loan from a bank. The annual interest rate does not reflect overpayment in any way. The actual overpayment is calculated by a compound interest. A rate of 70% per annum may lead to an overpayment of 20-50%, depending on the amount and term of the loan. When entering a financial company, do not hurry with the statement "I want to take a loan from a bank", ask more about current tariffs, monthly payment and the required package of documents. Most banks can issue a loan in two main documents, but with a maximum interest rate. When determining which bank is better to take a loan, do not forget to get a 2NDFL form certificate and a certified copy of the work book at work - this will help you cut costs. Be careful and deliberate choose a bank, then you can protect yourself from all sorts of troubles.