How much does the credit cost?

Credit cost

You pay off the loan with interest, and that’s what lenders make money from. Interest costs are calculated at the nominal interest rate. In addition to interest, overwhelmingly you also need to pay an establishment fee as well as a service fee.

In addition, other fees may apply in special cases. Some lenders charge extra if you delay your loan repayments. Others also charge an additional fee if you want to make changes to the loan agreement, such as changing the maturity or payment date.

Finally, there are often fees for physical billing by mail. Thus, you can save money by choosing an electronic billing solution when you enter into a loan agreement, you will receive invoices by email.

What is interest on a credit?

Interest is in addition to the commission you pay for getting a loan. Simply put, this is the price you pay for being able to borrow money. If there were no interest rates, no one would be able to borrow money, because then the lender would not be able to make money from it.

As a rule, interest is charged monthly or quarterly, but usually indicated for the year. This means that the full interest rate is not charged every month or quarter, because then getting a loan would be very expensive. The interest rate is indicated for the year.

The interest rate means that the cost of a loan becomes greater the more time you spend paying it off. Therefore, before applying for a loan, find out for what minimum period you can get a loan. Your finances may be a little tight for a few months, but it will pay off when it comes to how much you can actually save.

All fees of the credit company, including the establishment fee, service fees, loan interest, all together form the annual interest rate (APR) or the effective interest rate. This indicator indicates the total cost of the loan per year, and it is also the main indicator for comparing loan offers.

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