What you need to know about loans?

Suppose you want to buy “something” that you lack the current funds. What to do? By and large, there are only two options: accumulate the missing amount or borrow this missing amount. 

Suppose you do not want to wait until you accumulate the missing amount. You are eager to possess this “something” here and now. Then you need to look for someone who will lend you the missing amount. These can be relatives, friends, banks and microfinance organizations. Loan terms with relatives and friends can not be formalized, so we will not consider this option in detail. In this case, everything will depend on the relationship and agreements reached during the negotiations. 

With banks all the more difficult and easier. It is simpler because any negotiations with the bank on the subject of an individual change in credit conditions are practically excluded. The average borrower is too small a client for a bank so that a bank can spend additional resources on it to work out an individual solution. Therefore, you either agree to the terms of a particular bank or not. 

Harder with banks for the following reasons. First of all, there are many banks, and the conditions for lending are different. Several dozens of banks are engaged in lending to the population. Therefore, you first need to narrow the search to 2-3-4 banks. To do this, it is best to use specialized sites, where conditions for various loans from a large number of banks are collected in a convenient tabular form. For example, you can make a primary selection of banks on the site FinNews.ru. 

When the choice has narrowed to 2-3-4 banks, then you have to study the detailed credit conditions on the websites of these banks or in their offices. Because any bank has nuances that are difficult to formalize and correctly reflect on specialized sites. 

So, what should you pay attention to? 

Bank reliability

Some bankers we interviewed argue that when choosing a bank, you need to pay attention to its reliability. But, in fact, when you take money from a bank, its reliability should not worry you. He gave you money, not you to him. It is his should worry your reliability, and your ability to return the bank its money with interest. Even if the bank in which you took the money goes bankrupt – do you care? We repeat once again – not your money is with him, but his money is with you. Therefore, you should not care about the safety of this money, but he. 

By the way, you should not think that in the event of a bank ruin, everyone will forget about your credit and it will not be necessary to return it. In any case, you will have to repay the loan. Perhaps another bank that “buys” your loan from a failed bank. In any case, if the bank where you took the loan went bankrupt, you will need to figure out how to continue to repay your loan. After all, the offices of a bankrupt bank may be closed. And if you miss another payment as a result of this, your credit history may be damaged. That will negatively affect the future attitude of other banks towards you. 

The reliability of the bank should worry you only when you lend money to the bank, placing them on the deposit. Will the bank give you your money on time with interest or not? This is a big question that requires careful study. Yes, in case of bankruptcy, the Deposit Insurance Agency (DIA) will return the money to you within the 700 thousand rubles allocated by you in a bankrupt bank. But this will not happen immediately (usually after a month payments start in another bank), and it will cost you some nerves and time spent. Your nerves are worth it to examine the situation with the reliability of the bank before you put your money in it for a deposit, you decide. My job is to warn. 

By the way, do not try to look for objective information about the reliability of a bank on the website of this bank or in its offices. After all, no one has ever (with the exception of the hardened criminals) being proud of the negative information about their loved ones. It is better to search for such information on specialized sites, such as FinNews.ru, by viewing news on the bank. Particular attention should be paid to news from rating companies. And the most important thing is not the value of the rating itself, or even its dynamics, but the explanation of the rating agency, why it raised, lowered or left unchanged the rating of the bank. In these explanations, you can find very interesting details that are inaccessible to “mere mortals.” They will help you to understand how the situation will develop in the bank with a particular development of the situation in the Russian economy. If the “bird language” 

What kind of loan? 

When buying an apartment, everything is clear – you need to take a mortgage loan. Just because the interest rates on such a loan are much lower than on a consumer loan or on a card loan. In the latter two cases, you do not leave any collateral to the bank, so he considers such loans to be more risky and assigns a higher rate as an additional risk payment. 

When buying a car, everything is also clear – you need to take a car loan. Although there are already nuances. Car loan rates are higher than mortgage loans, and in many cases become comparable with consumer loan rates. You need to decide for yourself that you are more comfortable (not profitable, but more comfortable) – run around different places, collecting a bunch of certificates for the bank in the hope of saving a couple of percentage points on the loan rate, or spit on this savings, saving your time, strength and nerves. To do this, sit down and calculate how much you will pay the bank in either case and compare. 

But when buying less expensive goods and services, the question arises at full height, what to prefer – a consumer loan or a credit card. On the one hand, consumer credit seems convenient. I bought, say, a refrigerator on credit, paid off gradually with the bank, and forgot about it forever. We need to buy something else – again I went to the bank, issued a loan, bought the goods, paid off the bank, and forgot it again. He owes you nothing more and you owe him nothing more. And for a credit card you have to pay for the service annually. And pay much more than the cheapest debit card like Visa electron or Cirrus maestro. And if this year you have never used the credit limit of a bank, then a reasonable question arises – why pay more? 

But, on the other hand, a credit card is much more convenient than a consumer loan. In the case of a card, you only have to carry a package of documents to the bank once and wait for approval from the bank. And then during the card validity period you borrow money from the bank as many times as you see fit without additional visits to the bank. And the card will be reissued automatically on the same or even better conditions, if you, of course, did not allow delinquency. And in the case of a consumer loan, you will have to go to the bank with a package of documents and wait for approval every time you need the money. 

At the same time, interest rates on consumer loans and credit cards are comparable. In addition, many credit cards have a so-called grace period. It means that if you repay your debt to the bank during this period, the bank will not charge you interest for using the loan. 

So again it’s up to you to decide whether it’s more comfortable for you to pay extra money for simple debit cards every year, or to go to the bank every time for a new loan, wasting your time, energy and nerves. And money for transport, by the way, for a trip to the bank and back. 

Bankers themselves are advised to issue a credit card. Alexey Glavatskikh, director of retail business for the North-West branch of Rosbank: “If a client constantly needs small loan amounts, then it is best to issue a plastic card with a credit limit.” Igor Lappi, head of Sovkombank’s Tsentralny branch: “If you want to go on a trip, you may need to take a credit card – you can not only buy tickets and book a hotel, but also pay for purchases abroad.” But the final choice is yours. 

Documents provided by the borrower

When you have decided on the bank and the type of loan, you need to take a package of documents to the bank. With the documents that the bank requires to provide for the consideration of your application for a loan no difficulties should be. The list of documents at all banks is open and understandable. Yes, some banks may require a very large list of documents, including such, which will cost you a lot of time, effort and nerves. If your time and nerves are precious to you, just don’t try to get a loan from such a bank. Once again, at the moment, several dozen banks are issuing loans, and it is quite possible to find a bank without strange requests. Moreover, according to the head of the network sales department of the branch “Petrovsky” Otkritie Bank, Sergei Burov: “Very often, banks that require a large set of documents, 

Rates and tariffs

When you have decided on the type of loan, it is time to choose a bank. As a rule, the bank is chosen for economic reasons. Simply put, according to how much a particular bank asks for money for its loan. And the interest rate is not the only thing to pay attention to. Not for nothing some time ago, the concept of “full credit cost” (CPM) was introduced by law. 

The full cost of the loan is the borrower’s payments under the loan agreement, the amounts and terms of payment of which are known at the time of its conclusion, including taking into account payments in favor of third parties defined by the agreement if the borrower’s obligation to make such payments arises from the terms of the agreement. The total cost of the loan is calculated as a percentage per annum. In accordance with Bank of Russia Directive No. 2008-U, dated May 13, 2008, “On the Procedure for Calculating and Bringing the Full Cost of a Credit to an Individual Borrower”, a bank must communicate to the borrower information on the PSC before entering into a loan agreement. The same regulatory act establishes the formula for calculating the CPM. Until June 12, 2008, the term “effective interest rate” was used instead of the term “full loan cost”. 

The fact is that some banks, taking advantage of the economic illiteracy of the majority of the Russian population, used a technique bordering on a scam. They declared formally low interest rates, but at the same time stripped “three skins” from the borrower in the form of various commissions. “Commission for consideration of a loan application”, “Commission for the issuance of a loan”, “Commission for the transfer of credit funds”, “Commission for withdrawal of funds”, “Commission for early repayment of the loan”, “Commission for servicing the loan account” , etc. This is only a small part of the commissions that the borrower has recently encountered. When the state began to creak against the vicious practice of charging thousands and thousands of various commissions by banks, 

Also note that the “full cost of the loan” does not include some mandatory expenses in favor of third parties, the obligation of which the borrower derives not from the loan agreement, but from the requirements of the law (for example, when concluding an agreement on compulsory civil liability insurance of vehicle owners (CTP) ). The payments connected with non-compliance by the borrower with the terms of the loan agreement and some other payments are also not included. 

The vicious practice of imposing various commissions to the borrower has not been eliminated so far; therefore, choosing a bank only on the basis of a low declared interest rate will be a fundamentally wrong tactic when choosing a bank in which you take a loan. This is also indicated by the bankers themselves. Anton Pavol, Head of the Absolute Bank Retail Segment Department, said: “As practice shows, a small loan rate that is not always guaranteed guarantees the client a lower monthly payment than the same loan at another bank, but at a higher rate.” Tatyana Krylova, Vice President – Manager of the St. Petersburg branch of Promsvyazbank: “Sometimes, at the expense of ‘hidden’ commissions, banks compensate for low base loan rates. As a result, the cost of borrowing is higher, 

Unfortunately, the study of tariffs of different banks will not be able to pass on to someone else. The list of commissions for all banks is different, so they are difficult to formalize and correctly display on the same specialized sites. Therefore, you have a lot of work to carefully study the rates of different banks. The bankers themselves agree with this. Head of the retail lending department of Promsvyazbank Sergey Sitin: “The bank must find out which one-time and permanent payments will add to the rate announced to you. Always ask for the CPM calculation and the total overpayment on the loan.” And the deputy head of the retail lending department of Bank24.ru, Andrei Zavadskikh, recommends: “If you have questions, do not hesitate to ask the bank’s specialists” 

By the way, asking questions to bankers is another way to further check and drop banks. As Tatyana Krylova correctly noted: “If employees are reluctant to disclose information, then this is a reason for revising relations with the bank.” Leave such a bank without any regrets, despite the possible minimum rate or other advantages. After all, you cannot know in advance that this bank will still try to hide from you, and how much time, effort and nerves you end up losing afterwards. 

It is worth mentioning the so-called floating loan rates. As a rule, such rates have a constant component and a variable component tied to any interbank lending rate known in financial circles. Usually it is Libor or Mosprime. This rate might look like this: 5% plus Libor. The rate for the borrower will periodically change depending on the change in this variable rate. If Libor at some point in time is 1% per annum, then the borrower pays the bank in our example 6% per annum. And if Libor soars up to 10% per annum, the borrower will pay the bank 15% per annum. In dollars. On a mortgage loan. 

Say, this can not be? Look at the chart “Libor 12-month dollar rate”, and make sure that even some 20 years ago, such rates were a reality. Igor Lappi correctly noted that “during periods of economic instability (and we all live in such conditions in the last few years), these rates, and therefore the cost of your credit, can vary greatly. Your budget may not be able to transfer this.” Therefore, squeeze all your will into a fist, and delete from the list of loans with a variable rate, despite the apparent profitability of such loans to date. 

You should also refuse from loans in foreign currency. Again, despite the apparent profitability of such loans today. Recall how miserable in 2009 were the borrowers, who had taken “very cheap” loans in Swiss francs and Japanese yens just before the crisis. These currencies grew very strongly against the ruble, so the monthly loan payment, which is paid, naturally, in rubles, also increased. At one point, such loans proved an unbearable burden. Therefore, if you receive your income in rubles, then you should take a loan in rubles. So that later it would not be painfully painful for the family budget. 

Discounts and preferences

When choosing a bank in which you will take out a loan, please note that many banks encourage financially separate categories of borrowers. Usually by lowering interest rates on loans and / or reducing the number of documents required from a potential borrower. Therefore, first of all, consider the terms of lending in the bank whose salary card is in your wallet. Or in which lies your contribution. Or in which you have previously credited. However, it is possible that, even taking into account all the preferences, the conditions of this bank will not be the most comfortable. 

Loan agreement

Read the contract! This is the main rule. Read it carefully before signing. Read it in full, including all applications. Pay special attention to the text in small print, marked with an asterisk and various footnotes. If something in the contract is not clear, then, as noted above, do not hesitate to ask questions. If there is no sample contract on the bank’s website, ask the employee to print it to you. You do not buy a box of matches. You take other people’s money and for a while, and you will have to give your own forever. Therefore, carefully review all the items that say when, how and in what quantity you will give your bank money. Including possible penalties. All the bankers we interviewed in one way or another talked about the need to carefully read the contract. 

There is nothing more to add here, because each bank has its own version of the contract. We will simply list the main points to which it is necessary to pay the closest attention: “full cost of the loan” options that can be waived for a certain time; penalties; requirements for pledge and surety; terms of early repayment; contract termination procedure; rights and obligations of the borrower and the bank; procedure for changing the payment date and / or interest rate. 

Loan repayment

This is an equally important stage in the relationship with the bank. The way the bank organizes the loan repayment technology for its borrowers depends on how much time, effort, nerves and money you spend each month on this important procedure. As the spokesman for VTB24 in the North-West Federal District, Ivan Makarov, rightly noted: “Some banks still offer to repay the loan through the cashier, having only one or two offices in St. Petersburg.” And in these few offices it may well be a turn every time you make the next monthly payment. And these offices can be located very inconvenient specifically for you if you live and work in another area of ​​the city. These offices may not work specifically for you. 

Some banks offer, for a change, the possibility of making a loan payment through various payment systems. On the one hand, this is a plus. Especially when the bank has only one office, located to the same “at the devil on the kulichkah”. But this is also a minus, because every time you have to pay an additional commission to payment systems. There is one more minus. According to Ivan Makarov, “payment systems according to their own regulations have the right to make a payment, say, within three working days.” That is, you may have a delay on the loan, for which the bank will impose penalties on you (the amount of which is written in black and white in the contract, which you, I hope, have carefully read). 

Will online bank help repay a loan? Not sure. After all, the money in this Internet bank must still somehow be put. And for this, you still have to go somewhere and do something. 

Very precisely formulated the task that you have to solve Sergey Burov: “It is important to choose not only the cheapest loan, but also the most convenient one so that you can make a loan payment remotely and not pay the late payment fee while on a business trip . And this also needs to be done before you have chosen a bank and brought documents there. 

Is it worth taking a loan at all?

But, in fact, all these details and details written in the loan agreement in the smallest font, or some nuances, not even reflected in the contract, but relating to the work of the bank as a whole, are of secondary importance. First of all, you have to answer the main question for yourself – can you serve this loan during the whole loan period? The deputy chairman of the Agropromkredit bank, Pavel Ilyin, said very precisely: “The main thing is to understand that a loan is certain financial obligations that require a rational assessment of its capabilities.” IBSP Vice-President Maksud Kuprov adds: “The borrower must clearly understand how he will repay the loan received, what is his main source of repayment.” 

Will you have a job and a salary for the entire loan term? The answer to this question is not as simple as it seems. The experience of the fall of 2008 clearly showed that work and livelihood can be lost overnight. And even if only one family member has lost his job, this may make it difficult or even impossible to timely repay the loan. In the article “How to save savings during a crisis?” ) I brought arguments in favor of the fact that the whole world is on the verge of a new economic crisis (or the second wave of crisis, depending on how to assess the situation). If the crisis becomes a reality, unemployment in Russia will sharply increase again, as it was in 2008-2009. And that you may be among the unemployed. 

And imagine the situation. You are out of work, without money, and in addition, they periodically call you from the bank and demand to repay the loan. Do you need it? Therefore, the optimal behavior in the coming year will be if not completely abandon loans, then at least limit the loan amount so that it can be repaid at the expense of savings (for example, at the expense of ruble and / or foreign currency deposits, the currency stored “under the pillow”) . If there is no savings at all, then it is inappropriate to take credit now. 

Another option to find the answer to the question “is it worth taking a loan at all?” suggested by Sergey Sitin. You need to take 3 very simple steps: 

1) Determine the size of your net monthly income, divide it by 2. 

2) Add up all your monthly expenses, including: payments on loans and credit cards; expenses on food, accommodation and recreation and so on. 

3) Subtract the value of paragraph 2 of claim 1. The amount received can be considered as the maximum monthly loan payment. 

If the amount received in clause 3 is negative or close to zero, then Sergey Sitin does not recommend applying for a loan. Perhaps, I agree with this recommendation.

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