Borrowers decide to take out different amounts of loans by spreading their repayment over a period convenient for them. However, one of the most frequently granted bank loans is a cash loan of USD 2,000 spread over the two-year loan period.
In which bank will such a loan cost us the least?
Considering a dozen or so different banks operating in our country, a loan of USD 2,000 spread over 24 installments may cost us differently. And so the cheapest will probably be in the bank of which we are already clients, and thus keep our personal account, credit card or pay the mortgage in it. However, it is worth checking the price of such a loan in other banking institutions.
Today, it is very easy to compare credit offers from various banks and even non-banking companies that grant loans. The APRC (actual annual interest rate) is used for this purpose, which, in addition to interest on the nominal loan, also includes other costs of the loan, such as commission, insurance, and even a preparation fee. When looking for the best loan offer on the financial market, it is best to suggest this indicator – the higher it is, the more expensive the loan.
A loan of USD 2,000 spread over 2 years of repayment
It is the cheapest to give us a bank that most restrictively approaches the customer and places greater demands on the credit history accumulated in the Credit Information Bureau. If you have ever had a leg off when you pay back previous loans, so the installments were paid untimely, then we have nothing to count on the cheapest loan. Banks with the best cash loan offer don’t earn much on this product, so they don’t risk paying out money to unreliable customers.
The cost of cash loans can be significantly reduced by shortening the debt repayment time, i.e. the loan period. If such a loan is spread over 12 or 18 months, then the monthly installment will increase, but the bank will earn less on the loan granted.
On the other hand, by extending the repayment period (e.g. up to 36 months), our installment will decrease, the loan will be repaid longer, and we will give the lender more money from interest. It is best to shorten the loan term of each loan to a minimum, of course by choosing the installment amount to your real value