When a person thinks about applying for personal loans online, one of the first things that comes to mind is how much he will pay in interest. However, interest is not the only thing to pay attention to before deciding to ask for money. There are other costs of a loan that can go more unnoticed at a first glance but that are necessary to know. We will then deduct the costs of a loan in a bank to clear all doubts.
Costs of a loan in a bank
It is the best known cost and can be colloquially defined as the price charged by a financial entity for lending the money. It is calculated by applying a percentage on the amount borrowed. Interest may be fixed or variable. In the first case the person who receives the money knows from the beginning the total amount that he has to pay because it remains constant throughout the contract. As the client does not assume the risk of increasing the price of money, the rate is usually higher than in the case of the variables. In the latter, the rate is modified depending on the evolution of the type that is taken as a reference, such as the Capital Lender. There are also late payment interests, which are charged when the client fails to pay the installments provided within the fixed term.
The bank is paid the steps it has to do to verify the creditworthiness of the person requesting the loan. If it is not granted it is not charged, unless other people or companies have been involved in the analysis and have previously agreed with the applicant. It is usually charged as a percentage of the requested amount.
These are the fees for administrative expenses that, as the name implies, the opening of the loan and making the money available to the client. It is usually charged at the time the transaction is signed and usually consists of a percentage of the amount requested.
Conditions modification commission
The bank can require you an amount of money if you want to change any of the characteristics of the loan for the procedures to be performed.
If you decide to finish paying a loan before the agreement is agreed, you may have to pay. It is convenient to know the amount that the bank will charge for this concept before deciding to cancel it because there are cases in which if there is little left to end the fees it may be more beneficial to continue paying.
On the other hand, it should be noted that if you apply for a loan through an online financial institution such as Currency Now you can save many of these costs. In addition, the decision on the granting of the loan is immediate, so the process is much more agile than in a traditional banking entity.