The credit system allows people to buy things, real estate, stretching payment for a long time. This practice is spread all over the world and is convenient for all parties – a bank that receives interest, a seller selling a cheap product, and a buyer who acquires something for which there is currently no money. However, in lending, in particular for household appliances, there are several pitfalls that people do not notice because of the numerous myths.
The loan is cheaper the lower the interest rate.
It would seem that it is much easier to apply to such a bank or organization that provides this service with the lowest interest rate. However, few realize that in addition to interest payments, there are often additional payments, which can be called a commission, insurance … A loan of 8% with a monthly commission of 1.8% will ultimately be cheaper than a loan of 5%. The difference in the commission of banks will play on the final amount of payments, for the year delta will be 5.4%, which is 2.4% higher than the difference in interest rates. In order not to get into an unpleasant situation, the consumer is advised to require a full calculation of loan payments, then clearly and will be seen how much actually have to pay.
It is not profitable to borrow for a long time.
Approach to this issue should be based on its own solvency. Buying on credit, you need to evaluate not only the final cost of the goods, but monthly payments. Usually, with an increase in the term of credit, the amount of payments is reduced. It may be easier to pay longer, but less than to take on an immediately unbearable burden? The choice of the loan program is usually provided by the bank to the buyer to choose from a large number.
To get a loan you need to issue a lot of documents.
This myth discourages many from consumer loans. In fact, many home appliances salons offer loans, for the registration of which only a passport is needed. However, you should be aware that the less information about the lender, the higher the risk of possible complications when repaying the loan. So do not be surprised if the interest rate in such cases is higher.
The loan is drawn up for a long time.
Everything depends on where you take the loan. If you take it directly to the branch of the bank, then you can spend a week or more waiting for the answer, but if you make a loan in a store, then this procedure will take no more than half an hour.
On credit, you can not buy all the equipment.
It is not clear the origin of this myth, because the responsibility to the store is borne not by the buyer, but by the bank. The deal on purchasing equipment through lending is beneficial to the seller, he has no reason to hold any goods, since he does not risk anything, so there are no such restrictions in the largest hardware stores.
If the loan does not provide for an initial payment, then a high percentage is surely put in it.
It is not necessary, however, one should take into account a certain risk of the bank under such a program, so it is reasonable if you need a certificate of income.
Discount cards when buying on credit do not work.
The decision of this issue is entirely within the competence of the seller, usually serious trading networks in this matter meet the buyer, appreciating his regular customer. So do not hesitate to clarify this issue, it is possible that you will receive an additional 5-10% discount.
You can repay the loan only at the branch of your bank.
In fact, the bank does not make any difference where it will receive money for a loan. It is necessary to consider only that third-party banks can take an additional commission for such payments, so please specify in your bank a list of places and organizations that will accept funds without additional interest.
It is more profitable to take a loan from a bank than directly in a store.
This is not true, as the store often offers promotional offers on lending.Participation in such programs is beneficial for the buyer, and the conditions for processing the documents are greatly simplified.
Advantageous to buy goods in installments, rather than on credit.
Installment is in fact a type of credit that is provided for the purchase of a product agreed in advance by the bank and store. Not always installment provides for the absence of interest on the loan, they can be “hidden” and laid in an inflated value of the goods. Often, even the size of the initial installment in the installments is higher than with conventional lending. So, having decided on purchase of the goods in installments, estimate its real cost, estimate possible overpayment.
There are loans at 0%.
This question is ambiguous. Indeed, you can participate in the action, which the store itself organizes by its own resources and resources. More often, such a proposal is a marketing ploy, in such loans, interest for service or insurance is significantly increased, which gives banks the opportunity to earn the same funds. And sound logic suggests that hardly anyone will lend to themselves at the expense.