Personal loan: instructions for registration

Your seemingly reliable car has broken down and now needs urgent repairs, and the insurance company thinks it’s none of its business. Or you have very little money, and certainly need to go to another meeting of the whole family on an important occasion. Or the money is urgently needed to buy a broken and very necessary equipment. And although it is usually recommended to have a “stash” for such cases, in practice few of us think about it. And the only solution to the current problem is a visit to the bank. But in order to ask the bank for a loan, you must know what you are asking for, what the risks are, and how it works.

What is a personal loan

In short, a way to borrow money in one form or another. Loan purposes can vary widely. At the same time, the repayment of the loan can be guaranteed by a guarantor or collateral. You can get a loan not only from a bank. You can borrow money for a variety of purposes from microfinance centers, credit cooperatives, pawnshops, and even private lenders. But bank lending is still the most popular for a variety of reasons.

Let’s talk about forms. A personal loan can be given to you in cash, in cash, or by transfer to your card. Or the bank can pay for your purchase, which would be called a non-cash loan. These include mortgages, car loans, education loans, commodity loans and payday loans.

How to take out a personal loan

The difficulty in taking out such a loan will depend directly on the amount you are claiming. So, to buy something on credit is usually not very difficult. You will need a minimum of documents, and you do not have to go to the bank. Fortunately, in most major retail outlets and car dealerships or posted a counter at once several banks, or salespeople themselves for a percentage tell you about the conditions and prepare documents.

It will not take long to arrange a loan in cash. And if you decide to apply, say, the same bank where you get your salary, everything will be completed in the shortest possible time, because the bank knows exactly what you have a job and how much you get.

The hardest part is the mortgage origination process. And no wonder, because it occurs in several stages. And in addition to the borrower and the bank, it also involves an insurance company, appraiser, notary. Of course, the mortgage will require a solid package of documents.

Typical conditions

In order for the bank to give you a personal loan you must agree to its terms. Your consent you give by signing the loan agreement. This document must necessarily specify:

  • The interest rate per annum;
  • The term of the loan;
  • The amount of your monthly payments;
  • The amount of commission fees;
  • The amount of the insurance fee (if any);
  • The total cost of the loan you are taking out.

It would be completely illiterate to assume that the first and the last of these aspects are one and the same. The annual rate is purely an official figure that is designed to attract you as a customer. The full cost of the loan includes all of the above components and will clearly demonstrate how much the price of the loan will be.