AuthorAlbert Devlin

Cash Loan without Commission. Check Other Costs!

There are more and more loan offers without commissions on the market. Hearing about such products, we usually count on the possibility of borrowing money at favorable pricing conditions. Lack of commission does not mean, however, that the loan will be the best choice.

Commission is one of the cost components of almost every loan obligation. Under this concept there is a remuneration for the bank accrued for the mere fact of borrowing money. The fee in the form of a commission may be charged in advance or added to the monthly installments of the obligation.

Many banks avoid displaying a specific commission in their advertising materials, replacing this information with an approximate value or a percentage range. The particulars expected by the client fall only during a meeting with an adviser at the bank. Although the maximum loan costs are regulated by law, the option of calculating commissions gives banks a wide margin of maneuver in the area of ​​shaping the final costs of the liability. Therefore, the more attractive offers seem to be those in which banks clearly communicate that in the case of their loans, the commission is 0%. At first glance, it is a significant saving. Meanwhile, the lack of commissions, banks can bounce back elsewhere.

Insurance and interest, i.e. other loan costs

 Insurance and interest, i.e. other loan costs

In addition to commissions, the final costs of credit are also affected by such items as the interest rate or the need to purchase insurance.

The upper limit of the loan interest rate is also imposed by law (currently it is 10%). Within this limit, banks may, however, freely manipulate the amount of interest. Nothing, therefore, prevents the loan from being commissioned with a maximum interest rate.

The choice of a loan without commission may also involve the necessity to conclude an additional insurance contract. Although having such protection is often a great protection in case of unexpected problems with repayment, it is worth remembering that insurance can significantly increase the monthly installment of the loan, and thus also its final price. So if the costs of the commitment are a priority for us, it may be more financially advantageous to choose a loan with a commission or a higher interest rate, but without the need to purchase compulsory insurance.

Comparison of the necessary condition

 Comparison of the necessary condition

When choosing a loan without commission, we should pay special attention to interest and insurance issues. To assess whether or not we overpay it is good to compare the loan offer without commission with other products available on the market. This analysis will help special loan comparison websites that will tell us which solutions can be more beneficial for us. Of course, we will get the final price of the loan after a personal meeting with a consultant, however, the offer suggested by the comparator is a kind of hint, which the bank is worth visiting in the first place (kg)

 

A Loan For The Purchase. What Do You Need To Know?

Buying a used car is an option that is decided by a lot of people – both entrepreneurs and private investors. Unfortunately, very often, this kind of investment requires finding an attractive form of financing. What opportunities does the credit market offer us in this area? Which solution is the best?

A loan for the purchase of a used car – opportunities

 

There are two basic forms of financing the purchase of a used car, and they include a cash loan and a car loan. Both of them have their advantages and disadvantages, but individual products offered by lenders allow you to find the most convenient alternative to finance our investment.

loan – the pros and cons of such a solution

Car loan - the pros and cons of such a solution

If after a long search we find a dream car, but unfortunately the state of savings does not allow for its purchase from its own means, a car loan becomes a very attractive alternative. Like every credit option, it has its advantages and disadvantages.

The positive aspects of this type of loan include:

  • low interest rate,
  • relatively long financing period, which can reach even 10 years,
  • the option of choosing a convenient repayment option suited to the borrower’s ability,
  • very extensive selection of loans – some of the car brands have their own banks offering financing on very attractive terms.

The disadvantages of a car loan include:

  • a relatively high amount of liability,
  • quite a long period of completing the formalities,
  • requirement of own contribution,
  • the necessity of applying additional security on the subject of the loan, such as a registered pledge, transfer of ownership or assignment from the AC policy,
  • the bank is listed as a co-owner, and thus it is impossible to sell a car without its knowledge and consent,
  • necessity to purchase AC insurance.
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Cash loan – the pros and cons of such a solution

 Cash loan - the pros and cons of such a solution

A loan to buy a used car in cash is an option that gives you more freedom compared to a car loan. The cash raised in this alternative can be used to buy a car, but at the last minute we can also devote it to something completely different.

The advantages of a cash loan include:

  • quick acquisition of funds for the purchase of a car,
  • no need to apply collateral on the subject of financing,
  • minimum formalities – it is enough to obtain a personal ID and a certificate of earnings (sometimes only a statement is required),
  • after the purchase of the car, the borrower is its sole owner,
  • the money obtained under the loan can be used to purchase a car, but also for other purposes, eg holidays or renovation,
  • lack of own contribution.

Among the disadvantages of this type of crediting, one should first of all mention a higher interest rate than the one offered in a car loan.

 

A loan or cash loan – which one to choose?

 

 A car loan or cash loan - which one to choose?

The situation and needs decide first of all which alternative is better for us. In terms of financing, a car loan is much more profitable, the repayment of which can be matched to the possibilities. However, it requires an own deposit and many additional collateral, hence it may be problematic for some investors . On the other hand, cash loan is an excellent option for people who want to settle formalities quickly and efficiently, without explaining to what purpose money will be spent, but as a result it is more expensive solution.

Summary

 Summary

The loan for the purchase of a used car is an extremely interesting option for anyone who wants to buy a dream vehicle. The solutions available on the market are quite diverse, so every investor can find one that will be more optimal in his individual situation. (Q)

 

Early Repayment of the Mortgage. Is It Profitable?

 

Early repayment of a mortgage is not always profitable. The borrower may reserve a disadvantageous commission in the contract. So when it pays to pay off the commitment earlier?

Pursuant to the new Mortgage Loan Act of 23 March 2017, the maximum commission that a borrower can collect in the event of early repayment of a financial liability is 3% of the repaid amount. The Act also says that the commission rate may not exceed the total amount of annual interest charged on the repayment of the debt and that it may be collected only within 3 years from the moment of signing the contract.

Earlier loan repayment – how can you pay off the liability?

 

The loan commitment can be repaid in two ways:

  • Total, early repayment – a solution that requires a large cash inflow, but allows for large savings and reduces the time of charging interest
  • Repayment of a higher installment (than it results from the contract) – this solution allows you to shorten the time of charging interest and does not constitute a heavy burden for the borrower’s portfolio. During the duration of the loan agreement repayments can be made in an amount higher than that resulting from the repayment schedule, overpayments are counted towards the total repayment

Early repayment of the loan – examples of commission rates

Early repayment of the loan - examples of commission rates

In order to make early repayment of the loan, you must submit an order at the branch of the bank with which the obligation has been made. Commission rates in the case of early repayment of liabilities may be from 1 to 3% of the repaid amount . In the case of Deutsche Bank, if we make early repayment of the loan within 3 years of signing the contract, the bank collects a commission of 2% of the repaid amount.

Alior Bank SA requires the Borrowers to submit an instruction in a correspondence form or at a bank branch prior to the overpayment, most of the loan forms offered by the bank can be repaid earlier without additional costs. Similarly, Santander Consumer Bank enables its clients to make a full or partial repayment of a loan / loan earlier than the date of payment of the last loan / loan installment.

The Borrower should inform the Bank about the intention to repay the loan at least 3 days before it is made. Early repayment is charged with a commission of 1 to 1.5%, depending on the contract, in some situations you should also pay the costs of annexing the contract in the amount of PLN 30.00.

Is it worth repaying the loan earlier?

Is it worth repaying the loan earlier?

Until now, banks have independently established the principles of early repayment of mortgage loans, many of them have been charging commission for several years after taking out a loan. Under the new law, after three years from the repayment of the obligation, no fees can be charged. Earlier loan repayment is therefore more profitable than before the entry into force of the law and allows reducing the cost of borrowing.

This solution is unprofitable for loans with a fixed interest rate. In such a situation, the fee may be charged in the whole period in which the interest rate applies. (Kw)

 

 

Business loan: still falling for a while?

Credit-enterprises

Italian companies are reckoning with a still falling loan disbursement.

The latest financial statements released yesterday by the Bank of Italy indicate that, in July 2013, loans to SMEs show a tendential contraction similar to that recorded in June. In essence, the difficulties for the ‘access to loan by companies do not increase, but continue to persist. And it is a natural factor, which depends on the price in terms of suffering and substandard loans that banks are still paying for the most acute phase of the economic crisis, the one we are leaving behind.

while the bankleading superindex signals for the fourth consecutive month that a positive change is coming for the Italian economy, loan data still shows a decline in disbursements, even if, for company loans alone, the fall seems stop. It is also known that loan data always show the trend of the real economy with a lag: on the balance sheets of banks, the effects of the past economic situation continue to weigh, in the form of non-performing loans: their growth rate, without the correction for the securitization, but taking into account the statistical discontinuity, explains Bankitalia, it was equal to 22.9% in July, while in June it was 21.9%.

Business Expenses or Loans: What are Advertising Costs?

Each company relies on adequate advertising to appropriately present and market itself and its products or services. As a result, the so-called advertising costs arise. From a tax point of view, these always fall under the operating expenses. This reduces the profit. In addition, companies are reimbursed the listed sales tax as input tax. Advertising costs must not be confused with the income tax- relevant advertising costs.

 

General definition

General definition

Basically, the advertising costs include the entire cost of advertising. These include preparation and concept development, use of funds and appropriate control measures.

It does not matter whether the expenses are incurred in-house or in a specially commissioned third-party company. It also includes staff costs, material expenses and overhead costs for an existing advertising department.

 

Possible advertising media

Possible advertising media

Companies can access a variety of advertising materials. The use of business cards is widespread everywhere. They are regarded as a figurehead and occur in daily business life.

Accessories printed with the company logo, such as ballpoint pens or notepads, are often used as giveaways. Flyers and brochures draw attention to a company, a product range or the service offered.

It makes sense to buy all the promotional items from the same provider in order to save time and thus personnel costs. This guarantees a uniform look and consistent quality of the products – a factor that should not be underestimated in the area of ​​advertising media.

The online printing company CEWE-PRINT.de offers a large assortment of such advertising materials. Online ordering has the advantage of being able to do everything conveniently from the office.

The acquisition of customers also includes spots on the radio or television as well as a website. Even the entries in directories and newspaper advertisements fall under the advertising costs.

 

Sponsorship as advertising costs

Sponsorship as advertising costs

Benefits in the form of money or assets that go to clubs or charitable organizations can also be treated as deductible advertising costs. However, the prerequisite is a consideration that the company receives.

This would be possible, for example, the public naming of the company or the hanging of company posters or banners. This is different from a normal donation.

 

Expenses for the use of advertising material

Expenses for the use of advertising material

In addition to the actual production of certain advertising media further expenses for the use may arise.

These include postage costs for the dispatch of advertising letters or catalogs, rents for columns or walls on which posters are affixed, as well as fees for the broadcasting of commercials. These amounts are also part of the advertising costs.