Interests, commissions and penalties for delays can make the computer we have bought or the trip we have made thanks to the requested loan not as pleasant as it seemed to us in the advertisement where they offered it. To avoid dislikes when it is too late, before asking for a loan, it is worth stopping to study a series of double-edged aspects that can make us change our mind. Of course you have to always consider easy loans such as payday UK.
0% loans can be very expensive!
With holders such as “Get a 0% loan” the companies call our attention and make us wonder how an entity manages to obtain benefits without charging interest. The truth, obviously, -except for some exception as the financing offered by certain large stores- is that they do charge for leaving us the money and they can be very high amounts.
But they do it through other types of commissions or penalties that allow the lender to obtain benefits. That makes a loan to 0% can be more expensive than one to 7% without commissions. Therefore, before asking for the money, we have to pay attention to the interests and commissions we are going to pay. The most frequent are the following.
Nominal Interest Rate: Is the price we pay for the entity to leave the money, a percentage of the total amount we receive. The Nominal Interest Rate does not provide us with information to compare a loan with another due to the associated expenses and commissions that the entity includes.
Study commission: The company that lends the money can ask for a quantity – usually a percentage – for the steps it takes when studying aspects such as the solvency of the client or the viability of the operation. We have to know that if they do not finally grant us the loan, they can’t charge us this commission, but they do have other associated expenses -if they have had to pay other companies-, although this only in case they have previously agreed with the client .
Opening commission: The amount paid to the entity for the formalization and making available to the client of the loaned capital. It is also usually a percentage and is paid when the operation is signed.
Commission for modification of conditions or for change of guarantees: If the client requests to modify some characteristic of the loan, the financial institution can ask for a commission for the procedures that he has to carry out in order to change the content of the contract or analyze the new risks that suppose for the bank these modifications.
Commission for early cancellation or reimbursement: The bank stops making money if a customer returns an early part of the capital or if he pays everything he owes and terminates the contract. That is why it includes commissions that penalize this practice.
Other commissions: In addition, it is necessary to know if the granting of the loan entails the hiring of other products that may make it more expensive, such as a current account with commissions, a payment protection insurance, etc.