The title question asked a lot of people once. Although we do not think about it every day, sometimes, especially when we have financial problems, we think about it quite intensively.
Loans are often the only solution for us that saves our home budget and allows us to maintain financial liquidity. Although we should avoid him whenever possible, he should not be demonized either. We always try to look for the best offers. The best, ie the cheapest.
Let’s be precise
At the beginning we must clearly define what we are talking about. A loan is not the same as a loan. As a rule, they work similarly, but from a legal point of view, credit and loan are two different things. The most important difference is that the loan is a banking product and no non-bank institutions can offer it.
A loan is a financial instrument, which is most often offered by parabanks and other institutions of a similar nature.
Cheap and even cheaper?
There is only one answer to the question in the title – there is no such thing as cheap credit. We must realize that the bank does not lend us money out of goodness of heart, but only from the desire to earn. It doesn’t matter what we do, it will earn us anyway. This is something we have to come to terms with. When looking for a loan, we usually look at its interest rate. However, this is not the only important value.
We also have to pay a commission for granting it, we are often obliged to insure the loan. All these seemingly small total fees give a larger amount, which significantly increases the cost of the loan.
It’s just a business
Cheap credit does not exist. Borrowing money is business for a bank. Let’s be calm, however, because it is not just a cause for concern. Since the bank is really a company that wants to earn, it must take into account the competition, which is considerable. That is why customers are not in a lost position and are constantly flooded with further promotions and ever cheaper loans.
Cheap credit is a myth, which does not mean that we will not be able to find a favorable offer.