Cash loans are among the most popular bank loans and banking products in general. Such a loan is almost universal when it comes to financing the typical needs of an average household. It can be used for any consumer purpose, i.e. not related to running a business. With it, you can finance, for example, the purchase of equipment needed at home, going on vacation, or organizing holidays, or a large family event.
The loan, of course, costs, because interest is charged. For this reason, it is worth carefully reviewing numerous offers to find the most financially advantageous option, while financial profitability is not the only criterion here.
When it comes to costs, the most important is interest, which basically is directly responsible for how much the loan will cost us. In addition to interest, a commission fee may also be relevant, but this is not always the case.
Types of interest rate
It is also necessary to take into account the type of interest rate itself, which can be fixed or variable. A fixed interest rate is one that does not actually depend on interest rate changes and is the same throughout the repayment period. On the other hand, the variables will decrease if interest rates are cut, or increase if they rise. You can also consider the monthly costs associated with the installments and repayment method. For example, you can find offers with equal installments and with decreasing installments. In the first case, all installments are simply the same amount, while in the second case each subsequent installment is smaller, because interest is charged on the capital outstanding.
Before we get a loan, we will also have to go through some formalities, including checking our creditworthiness. The bank may ask us for a certificate of income, as well as require credit insurance or a guarantee by another person. It is also worth remembering to have other credit obligations regulated on a regular basis, as the bank may also look into our data in the Credit Information Bureau. Thanks to this, he will have access to information on whether we have paid back our previous obligations and we are reliable borrowers.