Loans are very popular in our country. This is a convenient way to improve your budget. One type of loan is installment loans – borrowers indicate that their main advantage is the fact that the repayment is spread over time. As a rule, customers determine the amount of loans and the repayment period. It is a very flexible type of loan, thanks to which you can adapt it to your own needs and expectations. In the article below, we answer the question on what the loan installment depends on. We invite you to read carefully!
What determines the loan amount – the most important information
The loan installment depends on the amount of the loan and its repayment period. The larger the loan amount, the larger the installment will be. The longer the period, the lower the installment. It is obvious. It is worth knowing, however, that these are not the only components of the loan installment. When we decide to take out a loan, we must also take into account other interest costs. What are interest costs? These costs include all fees that borrowers must pay when they borrow any kind of loan.
The amount of interest costs depends on the company’s policy – in the case of individual companies, their amounts may vary significantly in scope and type. In most cases, it is a commission and interest rate. Sometimes, however, you can also meet the initial fees and administrative fees.
The amount of commission – what does it depend on?
The loan installment depends to a large extent on the amount of commission. Each company applies its own financial policy in determining the amount of commission. It also takes into account the current trends on the loan market. At the moment, there is a noticeable general trend of reducing commission fees, which certainly pleases all borrowers. Most companies must follow this trend if they want to have a large customer base.
It is also worth knowing that all borrowers are protected by the Anti-usury Act adopted in 2016 – under it, the maximum amount of loan costs cannot be greater than 25% of the capital amount and 30% of the costs incurred annually. Many companies use numerous promotions under which you can even get loans completely free – as a rule, these promotions apply to people who first use the services of a given company. This applies most often to payday loans, but currently there is also an increasing number of promotions also in the case of installment loans.
Low installments is something good for the customer?
The vast majority of borrowers when choosing a loan company offer the most attention is paid to the monthly installment. It is not surprising – the smaller the installment, the easier it is to tighten your home budget. However, it should be remembered that as the repayment period increases, the total cost of the loan increases. That is why we advise against choosing loans with a very long repayment period, because we will have to pay a lot more for it.