When applying for a bank loan, it is worth remembering that the current move will have an impact on the next few years. That’s it, because even up to 12 years it can take a bank loan repayment period (unsecured loan, mortgage obligations can of course be much longer).
It is worth earlier to realistically assess your options for paying the installment. In the article we will present the most common mistakes made by people applying for a cash loan or consolidation loan . Borrowers’ mistakes, please read.
Borrowers’ mistakes: Working under time pressure
Rushing to apply for a loan will be the worst advisor. Customers who care about time are not fully familiar with the terms of the loan. After some time, they notice that their loan has had an interest rate increase , or that their loan insurance is inadequate to meet their needs. It is never recommended to rush in the process of applying for a cash or consolidation loan.
Similarly, a bank or credit advisor has no right to put pressure on us, until the next day or within a few hours the offer that the institution has offered to us will certainly not be missed. It should also be remembered that banks give a 14-day deadline to resign from the credit agreement we have signed . If something does not agree with the previously proposed conditions, you can exercise your right.
Suggesting credit ads and promotions
The purpose of the advertisement is to attract as many borrowers as possible for the bank. The conditions presented in the offer, bank’s advertisement are usually directed to the best group of customers. Yes, the banks have very cheap loan offers , unfortunately targeted at quite small groups of clients with the best credit standing.
The vast majority of customers will be presented with completely different price conditions. Therefore, it is worth the bank to provide us with various offers to suit our situation. Instead of blindly believing in advertising or unique offers of banks, it will be much better to pay attention to the real cost of credit , possible changes in cost over time.
Emerging bank offers are another issue. This applies, for example, to free credit offers , most often they are up to USD 4,000 spread over 12 months, where the APRC is 0%. Here the bank does not introduce customer categorization, the offer is either available to the customer or the customer will be refused.
Offer recommended by family and friends
Quite a common practice in the process of looking for a bank loan is to suggest the opinions of loved ones . This is obviously a good way because the offers are recommended to people we trust. They certainly wouldn’t want to hurt us by packing us in usury offers.
It should be remembered, however, that banks set the costs of their products individually. The costs depend on the assessment of us as a client, our scoring. Not necessarily the loan offer, which was very cheap for a neighbor, will also be the same for us. Already a difference in the number of children, the condition of the apartment, and the length of service may result in different loan price conditions.
It will definitely be better to ask an experienced person who knows the credit industry. In this way, we will be able to get the cheapest loan possible taking into account our credit assessment and scoring.
Borrowers’ mistakes: No comparison of bank offers
In order for us to have a reference point, it is worth comparing bank offers in advance. The Internet resources are teeming with various comparison websites and loan calculators. It is worth using them to give us an idea of which banks are proposing costs for the amount we are applying for. However, credit comparison websites should not be an indicator of what offer should be absolutely used. Banks change their offers too often for such tools to keep up with them.
In addition , they only provide estimates . The actual cost of a bank, cash or consolidation loan will always depend on the assessment of our creditworthiness. The cost may differ from the one previously calculated in the credit comparator.
If we are already comparing loans, it is worth doing it on the same parameters, i.e. the same loan periods. The mistake that customers quite often make is comparing loan installments, not paying attention to the fact that one of them is in 96 cities and the other in 120. The installment will be lower for a longer loan, but the total amount to be repaid is not necessary. It is also worth remembering about such details.
Too many credit inquiries
An officially submitted credit inquiry occurs when the bank requests from us proof of data and sensitive information, address, mother’s maiden name or marital status. Then the bank has enough information to generate an official credit inquiry . It is done by reading the Credit Information Agency database.
When there are too many queries (more than three in the last two months), the banks lower our scoring. Many inquiries are a signal to the bank that the client goes to other institutions for some reason.
Banks do not see why the client was making inquiries, they have no idea whether he was refused or just wanted to compare offers. When there are too many inquiries, customers are refused credit because of other credit inquiries.
In order to avoid the problem, it will be better not to generate official queries in banks, but only to ask about the possibility of lending. Only after gathering the necessary information, choose the best bank, where we will make a credit inquiry.