When applying for a consumer loan, banks usually require us a certificate of earnings, for which we often have to wait a long time, and the employer himself is reluctant to issue them.
What are our emergency exits if we care about time? The easiest way to get quick cash is to have a bank statement to which a fixed salary is transferred.
Quick cash for holiday expenses
Then we can borrow up to tens of thousands of dollars from the bank without submitting additional documents. Banks usually require confirmation of three salary receipts or full statements for the last three months.
This is the case with an employment contract. However, if we have a mandate contract or a specific task contract, then most often the bank asks for an account statement for six or twelve months together with contracts for the same period.
What can we do if we do not have a bank account, or the salary does not affect us? We can then submit an application together with a declaration of income.
In such a situation, the bank will most often grant us a loan of from several to several thousand dollars. This loan is more difficult to obtain because it is granted only to consumers who have a good credit history in the Economic Information Bureau.
Total cost in one place
The cost of each loan – regardless of its purpose – will be checked by one indicator: APRC – the Actual Annual Interest Rate. The APRC includes all credit costs, i.e. nominal interest (which is usually shown in bold in advertisements), insurance, commission, administrative fees (sometimes called preparatory fees). Currently, the maximum nominal interest rate may not exceed four times the Good Finance rate, which is currently 2.5%.
The commission and the preparation fees are one-off, while the insurance is usually valid throughout the entire contract period. Credit insurance usually protects us in the event of incapacity for work (in which case the insurer covers, for example, the cost of installments for twelve months).
It is also worth remembering that an additional loan amount is intended for insurance and the same fees are also charged. It is the gross loan amount that will show us how much initial costs we pay. If we apply for USD 10,000 and the gross loan amount is USD 12,000, it means that the initial costs will be USD 2,000.
What else should we pay attention to when choosing a cash loan?
There are several aspects that are worth paying attention to when choosing a loan offer. First of all, pay attention to the repayment schedule – check whether interest does not constitute the majority of the interest and capital installment. Let’s look for offers in which capital installments are higher at the very beginning because, in the event of early repayment of the loan, less interest will remain to be repaid.
We also verify whether as part of APRC all costs are given. Sometimes it may happen that the insurance offered by the adviser will not be included in the total cost of the loan, which is why such an offer will seem more attractive to us.
The holiday season is not only the magic of family gatherings but also shopping fever. Marketing departments of every company available on our market are put in the highest readiness. Remember to verify before signing the contract whether this “cheap loan with a low-interest rate” is certainly as beneficial as shown in the advertisement.