A credit application can impact your budget for several years. It is imperative to know all the facets of a bank loan to be successful.
Reasons for a credit application
The reasons can be many, but everyone goes through the bank loan. Emergency solution sometimes, solution of optimization of its investments, need to carry out works or to offer a pleasure otherwise inaccessible, a request for credit is today a natural act. Many banking institutions are here to help you take the plunge.
How to think well of your credit application?
Before you apply for a personal loan, and whatever the reason for the credit application, it is first of all necessary to ask yourself if you have the means to repay it. It is necessary for that to realize a simulation of your finances with the intended monthly payment.
This is something you can do before you even go to a bank or lending institution. For this, it is important to take into account its cash inflows, as its incompressible expenses and items that can be changed. And it’s up to you to see if funding for a new loan is possible.
Knowing that you can repay a bank loan is a good thing but does not put an end to your thinking. You must also know how to take into account the proposals that are made to you.
For this, the annual percentage rate, the rate charged by the lending institution is of course important. But in the same way that it is not the only element to take into account when you make a real estate negotiation, one must dwell on many points when applying for credit.
Will you allow early repayment, and if so with or without penalties? Does the rate vary a lot from one year to the next? Can you pause in your repayments in case of a hard blow? The terms of a loan are therefore equally important to consider.
But these data are sometimes also more complicated to find or understand. Especially for large sums, you must have the assurance that each condition corresponds to your situation, in addition to having an interesting rate.
The rate applied by an institution for a credit application is not the same from one institution to another. The reasons for this are very varied and include the specialization of the bank in this area, the ability to repay its customers, its commercial policy.
It’s no secret that loan companies that are not banks tend to charge more for their services than a bank. But this is not an absolute truth either. You must therefore make a comparison on several institutions, and do not hesitate to negotiate the rate charged.
The call to a broker is an interesting solution when your loan application exceeds the 10,000 euro mark. The broker will be your representative to credit institutions. And if he himself takes a commission on the final transaction, his margins of negotiation with your file often allow you to be a winner.
It only works with big files but it’s an idea not to be put aside.
At once so simple of accus and yet so complex in the details, a request for credit must be made in the reflection, the calculation and the comprehension of all the variables to make the best possible operation.