You can find a loan with a low interest rate when you can compare the loan services with one another. In addition, it is always a good idea to pull home a bit, that is, to favor Finnish operators, whose services comply with all the regulations and laws set in Finland.
When comparing loans, it is worth comparing the actual annual interest rate, which tells you the size of all the costs associated with the loan. But it is good for the comparator to keep in mind that loans with different repayment periods are not fully comparable, even with the actual APR.
Most lenders offer personal loan agreements to applicants, with interest calculated on a case-by-case basis. This ensures that the applicant will obtain a loan agreement that is suited to his or her financial situation. At the same time, the lender will receive some assurance that the loan will be repaid.
How is the interest rate on a loan determined and how can I ensure I get a low interest rate loan?
What you should pay attention to when choosing a loan
The interest rate on a loan determines most of the cost of the loan, although there may be other costs associated with the loan. Other costs of the loan may be, for example, the opening fee or the account management fee. Under the new legislation, these costs represent an increasingly small part of the cost of a loan, as the charges may be charged on the loan only 0.01% of the amount of credit in the credit agreement and up to a maximum of only $ 150 per year.
Here are some things to keep in mind and compare when looking for a low-interest loan:
1. Nominal interest rate vs. real annual interest rate
If you are specifically applying for loan interest information, the nominal interest rate is the percentage you are applying for. The nominal interest rate is the price paid for the loan for the period it is in the borrower’s disposal.
But it is not that simple, because as mentioned above, there may be other costs associated with the loan that will increase the amount of the loan. Adding all the costs together with the nominal interest rate using a complex formula will ultimately result in a real APR that reflects more on the total cost of the loan.
Unsecurity raises the interest rate of the loan somewhat, because when the lender does not require collateral from the borrower to repay, the issuer of the loan takes a greater risk.
Of course, cheap unsecured loans can be found in the domestic market and by comparison you can find the best loan service. For example, Balance loans are unsecured loans, but at the same price.
3. Loan period
The loan period goes hand in hand with a low interest rate. Of course, the shorter the money borrowed, the lower the interest paid. Thus, the loan period does not necessarily affect the interest rate, but because the interest is paid for a shorter period, it is lower.
For the sake of certainty, many people take a long loan to keep their monthly installments lower. This is also worthwhile, as there is no reason to take on too heavy a financial burden in the form of a large monthly installment. However, even in this situation, you can play with the interest and pay off a larger installment as much as possible, or even the entire loan at once and save on the loan’s interest costs.
Of course, a quick loan is a quick help in an acute situation, but as with unsecured loans, the speed of raising the loan slightly.
But since the law regulates interest and other charges on all loans, Instant Loans are no longer worthy of their bad reputation. You can now get a quick loan at almost the same price as other loans.
5. Applicant’s financial situation
The lender always makes a risk assessment when applying for a loan. The risk is assessed, inter alia, on the basis of the financial situation of the borrower. If the financial situation is good, you can easily get a loan at a low interest rate.
If the applicant’s financial situation is a bit tighter, ie there are other payment obligations, this may affect the interest rate of the loan. Or to get a loan at all.
It is always a good idea to favor domestic lenders, as their terms and conditions are guaranteed to comply with Finnish law and regulations.
Domesticity affects more than the interest rate of the loan. A domestic operator is also more easily reached if you have questions about your loan or need help with your loan application.
When looking for a low interest rate loan, there are many things to keep in mind and make comparisons. And interest rate is not the only thing a borrower should watch to get the best service for themselves.