There are few situations in life where you need to make such a well-considered, thoughtful decision as you would with a borrower, as it can be decisive for your finances for many years to come . That is why we help you to collect the most important questions that you need to ask yourself before you commit to a loan.
What is your purpose with the loan?
The first step in choosing a loan is to think carefully about what the loan needs . You can usually take out a loan for specific purposes only on more favorable terms than a free use loan. A typical loan goal might be a home or a new car, but if you want to decide what you want to spend on your loan for, you might want to consider free loans.
It is better to take out a loan for a specific purpose, as banks see less risk in targeted lending than if they cannot control what the money is going for. For example, in the case of a mortgage loan, we can apply for a home loan at more favorable interest rates than if we wanted a free-use loan. Lower risk, lower interest . The situation with an unsecured car purchase loan is the same: you can expect a lower APR than a free-for-sale personal loan.
Are you willing to raise funds?
If you have collateral for your loan, you may want to choose these loans, because collateral can get you money on better terms than a personal loan. The reason for this is that banks consider such a loan less risky, as in the worst case they make money on the pledged real estate or movable property.
You can take out a mortgage with a minimum value of 4-6 million HUF. Some banks already accept a car with a maximum of 12 years as cover for car loans.
How much does your credit cost?
After all, in a difficult situation, however much we pay for the administration. Therefore, it is by no means a negligible aspect what the upfront costs are. The upfront costs of mortgages are extremely high compared to other loans, as there is a separate charge for, for example, valuation or credit brokerage.
The full APR includes many of these costs, so it is advisable to list the banks’ quotes according to the APR in the loan calculator. However, the THM does not include, among other things, the notary’s salary, which by default is at least HUF 70 thousand. And for personal loans, we are waiting for the disbursement fee, the credit appraisal fee, the management fee, and there are some where the bank requires you to have a loan collateral to borrow.
How do you plan ahead?
When choosing a loan, you also need to decide what kind of long-term loan you choose. If you are more cautious, it is worth thinking about the longer term , so that the family cashier can safely miss the installment payment for the month.
If it turns out, you will have the option of early repayment or early repayment, because paying these fees is still better than a higher-interest, shorter-term loan. Prepayment is when the borrower pays a minimum of at least 3 monthly installments. If someone pays the entire outstanding debt, it is a final repayment.