In life, there are times when you need more money than you have. Of course, you should not turn to the pawnshops and loan sharks: the network has enough material on the actual cost of this type of “lending”. Borrowing from relatives or friends is also a dubious pleasure. You can ruin a relationship for the rest of your life. If you do not have stock for a rainy day, it is better to contact the bank or a lending company.
Necessary and sufficient condition for a positive decision
So you need money. You name your achievements: expensive car, apartment, cottage. The bank employees smile nicely, but you get a refusal. No one explains the reasons, but they are. I tried to figure it out.
The bank is created for profit. The bank has few assets, it attracts borrowed funds and is itself a large borrower: depositors, the Central Bank, and other banks – its creditors.The bank operates mainly with highly liquid assets – money. You must make a profit, which is formed from the interest rates on the loan.
- situations when the borrower is dishonest or is declared bankrupt;
- mass closure of deposits.
Thus, the bank “trades” money, and there is no sense in its activities. The bank “sells” money to you by installments and wants (is required) to receive money for its “goods”. Any loan is secured by the borrower’s money in the form of his income. The loan is not in obtaining money, but in receiving money.
The reason for the negative decision in your case is banal: you do not have your money in the future. Your banking assets are not liquid. Cash flow is the only argument in favor of making positive decisions on granting a loan. The rest of your assets will be influential, and then indirectly, on the loyalty of the bank.
A prerequisite for obtaining a loan is a proven stable income. The fact of the presence of income is a guarantee of obtaining a loan. The amount of income is important, but it will already affect the parameters of the loan.
Can I get a loan cheaply?
So, if you need money now and you want, and most importantly, you can give it back in the future, then you can proceed to consider the parameters of the loan that will be issued to you. Banks and lending companies constantly come up with new loan products:
- they vary rates,
- change conditions,
- “simplify” procedures,
- “return” interest,
- “refinance” something.
These all is about marketing. The essence remains the same: they sell you money for money. The main postulate is that there are no cheap loans.
With a low rate, it is always very difficult to comply with all the rules for obtaining it and, most importantly, fulfillment of loan obligations. “Fine print” is especially small and insidious. Here, for example, a typical footnote in the contract when calculating the rate:
“The rate of 11.5% becomes effective subject to timely / proper payment of monthly payments during the first 4 months (with a loan term of 12-18 months); the first 8 months (with a loan term of 19–36 months)…”
Everything seems to be clear, the rate is 11.5% per annum. But look a little higher: “Rate: 24.9–38.9% per annum (with a loan term of 12–18 months), 22.9–37.9% per annum (with a loan term of 19–36 months)…” Everything is fundamentally changing. You take a loan at a rate (averaging for simplicity) of 31%, and if you don’t delay payments within 4 months, you will receive a rate of 11.5% for the remaining term and the remaining loan body.
Of course, this is also very good: the rate fell three times. Since miracles are hard to believe, and bankers do not believe in altruism at all, the question “Why did the bank decide to meet me?” there is an answer: “At the time of concluding a consumer loan (loan) agreement, the total cost of the loan cannot exceed the calculated medium market values of the full cost of consumer loans.
Getting a low loan rate is a creative process. No one will provide clear algorithms for you, you have only statistics at your disposal. Here, the indirect signs of your income begin to play a role:
- real estate (the more and newer, the better),
- the car (the more expensive and newer, the better),
- the regularity of foreign trips (going abroad in the last six months will benefit),
- family (if you are married and have children, the chances increase, but not linearly: if you have more than two minor children, this will have the opposite effect),
- appearance (expensive clothes, accessories – everything will do you a plus).
Often, holders of salary projects cards served by the bank have privileges when obtaining a loan in it.