What is the cost of the loan?

You pay off the loan with interest, and this is what lenders earn money on. The interest payment costs are calculated at the nominal interest rate. In addition to the interest, in the vast majority, you also need to pay an institution fee, as well as a service fee.

In addition, other fees may apply in special cases. Some lenders charge an additional fee if you delay paying off the loan. Others also charge an additional fee if you want to make changes to the loan agreement, for example, in relation to the maturity or payment term.

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

What is the interest on the loan?

Interest is an addition to the commission that you pay for obtaining a loan. Simply put, this is the price you pay for the opportunity to borrow money. If there were no interest rates, no one would be able to borrow money, because then the lender could not earn money from it.

As a rule, interest is accrued monthly or quarterly, but it is 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 the loan becomes greater the more time you spend on paying it off. Therefore, before applying for a loan, find out for what minimum period you can get a loan. It may take a few months for your finances to become a little tight, but it will pay off when it comes to how much you can actually save.

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