If you want to borrow several hundred dollars from Good Finance for a short time, it won’t be a cheap loan.
In the financial world, the rule is that the less you take, the more expensive it will be. Why is that? Because Good Finance, with a small loan, has similar overhead costs to a large loan. They count in the higher interest rate or in various fees. ” The lower the amount, the greater the cost of the loan ,” explains Maroš, director of the Financial Compass portal.
In addition, small loans are considered by banks to be more risky and therefore you pay for them.
The lowest interest rates are for mortgages, which are currently around 1%. They are higher for consumer loans , which range from 3.7 to 18%. You can find their overview here. This is followed by credit card loans and overdrafts, where you pay up to 20% per year. The highest interest rates are on low loans and installment purchases, which may rise above 20%. Fortunately, the state has already regulated the interest rate ceiling and explicitly usurer interest in hundreds of percent has disappeared from the market. Unreliable non-banknotes were similar.
Don’t just look at interest
However, the more expensive loan may not be the one with the highest interest rate. ” It is not a rule that lower loans are always more expensive, everything depends on the internal credit policy of a particular Good Finance ,” says Lýdia Asfre, spokeswoman of Good Finance . Financial houses assess several factors when determining the interest rate and the amount of the loan does not always affect the amount of the interest. “ The client can get a favorable and interesting interest rate even with a low credit ,” says Anna Jamborová, CSOB spokeswoman. At this bank you can get a consumer loan from $ 600 at a rate of 5.5%. With an interest below five percent, you will be lent a few hundred and even Good Credit.
Therefore, experts advise to compare the loan not only on the basis of interest, but also on the costs associated with it. ” The decision is best served by the annual percentage rate of charge, which represents the total cost of the loan ,” advises Asfre. With a low loan amount, the RMPN can sometimes rise above 40%, as Good Finance will count on insurance or loan fees. (see table)
- How a non-binding offer of credit from Good Finance coincides with the real one
- Pre-approved loans – their advantages and disadvantages
- How to choose a suitable loan?
- How and where you can borrow
- How do you recognize an unfair non-banknote?
For borrowing for a longer period of time
For example for a year or more, experts say that a normal consumer loan is more advantageous. This can be repaid by regular monthly installments for a longer period from a few months to 8 years.
It should be noted here that the longer you repay the loan, the more you will repay it.
Therefore, consumer credit is suitable for more expensive things that you can repay longer – such as the reconstruction of the apartment. The disadvantage is that Good Finance will check in more detail your income and your ability to repay. So its equipment can take longer.
- What is a credit register
Overdraft and credit card allowed
If you want to borrow only a few hundred dollars for a few days or weeks and as cheaply as possible, according to experts, you should consider a previously permitted overdraft. Although Good Finance charges interest up to 20% per annum on this loan, you only pay interest on the days during which your account is overdrawn.
But if you have been down for too long, it can cost you tens to hundreds of dollars per year, depending on the amount overdraft. Experts therefore advise to use the authorized overdraft only to bridge short-term outages within one month. The same applies to credit cards where you have an interest-free period of more than 50 days. However, solving your debts with a credit card in the long term does not pay. There are also high interest rates and extra penalties for delays.
If you buy in installments, you take basically a consumer loan, but with a non-banknote. Merchants cooperate with various payment companies such as Quatro, Home Credit and Triangel. These companies promise you quick on-the-spot loan processing, low repayments and even free shipping. Non-banknotes mainly specialize in low loans of several hundred dollars, for example for washing machines or TVs.
” Installment purchase will satisfy clients who are interested in buying specific consumer goods and do not need any extra funds ,” explains Asfre.
The interest on these loans is quite high. They range from 10 to 20% per year and sometimes more. In addition, you should beware of late penalty penalties, which are high, as well as various credit processing fees. The annual percentage rate of charge (RPMN), that is, what you actually pay for the loan, may be higher than 20%.