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Positive and negative sides of the loan. What is more profitable: a loan or a mortgage? Pros and cons of refinancing a loan

Loans have long been part of the life of almost every person, and at the moment it is one of the most common banking services that can be offered not only to individuals, but also to legal entities, in order to help them solve their financial problems. Getting a loan today is no big deal. You just need to provide a minimum of necessary documents, submit an application to the bank, and the terms for approval of such an application, as a rule, are not long at all. Therefore, people actively use this opportunity, because it is very difficult to save money for the purchase of any property or, for example, household appliances, especially when a person needs such property urgently. As with any phenomenon, a loan has its pros and cons. We will talk about this and many other things further.

Loan classification

Loans that a bank can provide to citizens are classified according to the following criteria:

By subdivided into individually defined payments, lump sum and annuity, which are the most common and involve payments on the loan in a certain amount on a monthly basis.
According to the method of collateral, there are also several types of loans - surety, pledge or without collateral. The higher the loan amount, the more guarantees the bank needs in order for the borrower to confirm his solvency. In these cases, the bank may require collateral as security. Most often, such collateral is real estate or vehicles. Or the bank requires a guarantee, which is a written confirmation of such guarantees from third parties. However, a loan without collateral has the advantage that there is no risk of losing the pledged property.
By loan term. As a rule, the term of a loan does not exceed five years, but if it is a secured loan, then in this case its terms can be much longer.
According to the interest rate.

Advantages of such a phenomenon as lending

In general, this process has a lot of positive aspects:

To apply for a loan, you do not need a lot of documents, but only a minimum number of them. Depending on what requirements the banking organization puts forward, sometimes the list of documents is limited to only a passport and a driver's license, and a certificate of employment and other documents are not required.
The short term for consideration of the application is just a few days.
Ability to receive funds immediately. The obvious advantage of a bank loan is that the client receives money on the day of application, which allows him to realize his plans or solve financial problems as soon as possible. If a bank client needs to make a purchase, then receiving the money immediately, he does not risk his plans, because it often happens that the product that he planned to purchase is sold in a few days and disappears from the counter, or the price for it changes significantly - the price of the goods may rise.
The advantage of a loan is the gradual repayments. Currently, almost any client can choose the most suitable loan option for himself. This is due to the fact that banks are constantly reforming and developing their credit system, which allows them to have a sufficient number of customers for their development and prosperity. The loan can be repaid monthly - such loans are called annuity. In this case, the borrower can choose the amount of payment individually, taking into account their financial capabilities.
The advantages of a secured loan are a large limit and lower interest rates, but all risks must be assessed.

Is there a benefit for institutions?

The advantage of a loan for an enterprise is the ability to expand its field of activity. For some organizations, this banking tool generally serves as the start of work. In addition, the conditions for lending to enterprises are very different.

What does refinancing mean?

Refinancing (refinancing) is the receipt of a new loan in order to repay the previous loan in another bank on other, more favorable terms. In other words, this is a new loan to pay off the old one.

Pros and cons of refinancing a loan

The benefits of refinancing are as follows:

Reduction in monthly payments.
Change the currency in which payments are made.
Consolidation of loans in different banks into one.
Reducing the interest rate.
Removal of an encumbrance from a pledge.

Disadvantages of refinancing:

Additional expenses, meaninglessness of the process.
A maximum of 5 credits can be combined into one.
Obtaining permission from the creditor's bank.

Credit Disadvantages

The main disadvantages of loans include:

By providing loans to customers under a simplified system of lending and application processing, the bank experiences huge risks of non-repayment of funds. In these cases, banks do not have enough time to check all the necessary documents and solvency of the borrower, and since one of the goals of banks is to attract as many customers as possible, banks are forced to compensate for possible losses in such a way that they benefit in advance from the increase in interest rates. loan rates. Interest is calculated according to general principles - the longer the loan repayment period and the larger its amount, the higher the amount the borrower will have to pay as interest, and the higher the overpayment will be if we compare the amount with the original one, which is not an obvious advantage of the loan.

Recently, banks have begun to offer their customers the so-called interest-free loans and advances, which is a very effective marketing ploy. In such cases, the borrower is attracted by bright promotional offers, but he forgets that no bank ever works to the detriment of its financial well-being. Usually in these cases, numerous commissions for issuing a loan and its servicing are disguised as the principal amount of such loans, so the bank does not lose anything here, moreover, it acquires the necessary benefit, even if it is minimal.

Rational use of loans

A loan should be taken only in cases where you need to purchase some expensive, but at the same time necessary items for life - vehicles, household appliances, furniture, or building materials for the repair of a dwelling. In such cases, it is advisable to take a loan for a short period, approximately 2-3 years, in order to repay it as soon as possible and thereby terminate your material obligations. It is not recommended to take on credit responsibility in case of various kinds of “force majeure”, for example, a loan to pay for treatment or vacation, since in these cases there is too high a risk of not overpowering such liability.

It is very practical to take out a loan in order to purchase a home, because there are special mortgage loans in banks that can take the necessary amount of money at low interest rates.

For those who decide to start their own business

There is a big risk of not paying off the loan in cases where the loan is taken from borrowers to develop their own business. Such a loan should pay for itself within six months, but if this does not happen, the person is at a loss. Financial liabilities grow and accumulate, and if the business does not generate the necessary income, the risk increases even more.

Don't be swayed by shopping

You should not take on credit obligations directly in stores, in cases of purchasing certain goods. Such express loans imply extremely high risks for banks, therefore, in any case, banks compensate for the costs incurred by increasing loan interest. The overpayment for the goods in these cases will be unusually high. When purchasing goods in stores, it is much more profitable to use credit cards. In most cases, with such a credit scheme, a one-time commission is charged upon purchase, which is about 20% of the total cost of the purchased goods. However, when returning the goods back to the store, such a commission is usually not returned, since it is considered as payment for services for drawing up a loan agreement.

Finally

Whatever attitude you have towards loans, it is important to remember one very important thing. Under any circumstances, you need to carefully read the contract that you conclude with a financial institution. Otherwise, the consequences may not be the most rosy and overshadow your joy from quickly received money.

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The negative side of credit

For convenience, we decided to divide the negative points into 3 points:

Interest. Given the interest that we have to pay, we buy goods at a higher cost. For example, buying a car on credit, the buyer can pay 1.5 times the cost of his car. Naturally, such expenses are a negative factor.
Responsibility. After receiving a loan, it becomes necessary to consistently make payments, and you need to treat them responsibly. In case of delays in payments, additional interest is charged, as well as credit history deteriorates.
Psychological state. The presence of credit obligations affects the psychological state of a person. Psychologists say that stress is one of the most negative conditions, and in the presence of a loan, people often experience it.

If you are thinking about whether to take a loan, then you definitely useful information from this article. There is nothing wrong with loans, they really empower people, but at the same time, you need to realistically assess your ability to pay, as well as provide for the risks you are taking.

We often receive various questions, one way or another related to lending. There are a lot of questions about mortgage lending. Today we will consider a question from Stanislav. He asks us what is more profitable - a loan or a mortgage?

In fact, this question arises very often and the reason is banal: a person wants to buy an apartment on credit, after which he begins to be interested in credit programs. For example, an apartment costs, say, 2.5 million rubles. This amount can be obtained both in the case of a mortgage loan, and in the case of a consumer loan. Therefore, I want to understand what is the best thing to do in order to save my money.

In fact, potential borrowers have little choice: in most cases, they have to agree to a mortgage. Why? As you know, when it comes to mortgages, the apartment that the borrower purchases is a pledge in the bank, and the bank becomes the mortgagee. This nuance allows you to take a large loan amount without attracting borrowers and without providing additional collateral. In the case when the bank is the mortgagee, nothing can be done with the apartment without the permission of the financial institution: not to rewrite it to a relative. If we are talking about consumer lending, then the same amount of 2.5 million rubles will not be issued by the bank just like that - it is necessary to provide a pledge or a guarantor, or even several at once. However, if there is such an opportunity, it may turn out to use a consumer loan to buy a home.

Now you yourself will understand why it is better to use mortgage lending. We have prepared for you a list of the positive and negative aspects of each of the two mentioned types of loans.

Benefits of mortgage lending

Mortgage interest rates are usually lower due to the fact that this is a targeted type of lending. In addition, the bank becomes a pledgee, which reduces the risk of default on the loan.

Long term loans. In some cases, a mortgage loan is issued for up to 30 years, in the case of a consumer loan - usually no more than 5 years.

If you need to get a large amount to buy a home, you can attract family members as co-borrowers, thanks to which the loan amount increases.

The maximum loan amount for mortgage programs is often much higher than the maximum amount for a consumer loan.

Positive aspects of consumer lending

The speed of obtaining a loan and receiving funds on hand.

Often it is enough to provide only a few documents for the bank to make a positive decision on the application.

Less overpayment on the loan, since the loan term in this case is several times shorter.

The opportunity to receive a larger amount at a lower percentage if the bank has an account or a salary card.

Negative aspects of mortgage lending

Big payoff in the end. If you calculate the entire amount of the overpayment at the end of the debt payment, you can be very surprised - the borrower overpays 2-3 times the cost of the apartment, or even more. However, if you take into account inflation, it may turn out that the borrower will be in the black.

Although the housing belongs to the borrower, in reality he cannot do anything with it without the consent of the bank.

Quite a large package of necessary documents.

High criteria for selecting borrowers, so it is quite realistic to get a negative answer on the application.

Payment for additional services. For example, the borrower does not have the right to refuse payment.

It is difficult to get approval if housing is purchased in the secondary fund.

Negative aspects of consumer lending

Relatively small loan amounts, which are often not enough to buy an apartment.

Usually higher interest rates.

Short loan term.

Large monthly payments if you take a loan of several million.

And what about, you ask? In fact, in the vast majority of cases, a mortgage will be more profitable for the borrower, whatever one may say. And yet in some cases it is better to use a consumer loan. When? For example, if the borrower does not have enough to buy a home, say, 300 thousand rubles. That's when it really is better for him to turn to the bank for help: he can pay the money quickly, besides, the bank does not become a pledgee.

Of course, the final decision is up to you. We recommend that you familiarize yourself with the loan programs in more detail and use the calculator for calculation.

Banks, in a highly competitive environment, make loans more accessible to consumers: more and more loyal loan programs are being created, and the lending procedure itself has become much simpler. For example, before 2005, in order to take out a loan, it was necessary to provide local registration, a certificate of official income, liquid collateral (real estate, vehicles, goods in circulation, etc.) and a down payment. Now, in many cases, loans are issued on the basis of a passport. At the same time, it cannot be said that consumer lending is developing completely without problems. On the contrary, the parties to legal relations are accumulating more and more claims against each other. Lenders are dissatisfied with non-fulfillment or improper fulfillment of obligations under the contract by individual borrowers, the number of which also increases with the growth of consumer lending. Cases of fraud on the part of individual customers do not cause much joy either. As a result of all these actions, overdue debts of banks are growing, which causes some concern not only for them, but also for the authorities, since history knows examples when in some countries this led to an economic crisis. On the part of consumers, certain and sometimes justified complaints are caused by the opacity of lending conditions, all kinds of additional commissions, not to mention the payment for the services of independent appraisers, the payment of insurance premiums, and so on, which greatly increases the cost of loans. It was this circumstance that raised the question of the need for explicit disclosure by creditors of the so-called effective annual interest, that is, the total price of a consumer loan for one year, which should be indicated as a certain percentage of the amount received by the consumer under a consumer loan agreement. If the agreement provides for the possibility of changing the interest rate or other conditions affecting the price (cost) of a consumer loan, the initial effective annual interest may be accepted as the effective annual interest during the term of the agreement. Meanwhile, it is interesting to note that these problems are usually not as acute when banks are engaged in non-consumer lending, that is, when they lend to legal entities and individual entrepreneurs, although in this case they also face defaults and the emergence of overdue debts. Apparently, this is due to the fact that the detachment of subjects involved in entrepreneurial activities is relatively small, and therefore their relations with lending organizations do not receive the same public outcry as is the case in the case of lending to an army of millions of consumers. In addition, due to the specifics of their activities, entrepreneurs are more financially literate than ordinary citizens. We summarize the identified shortcomings of consumer lending in table 3.1.

Table 3.1 - Negative aspects of consumer lending

The bill "On consumer lending" has not yet been adopted, which would have legal regulation of a number of issues that prevent this type of lending from developing fully, in particular:

Increasing the financial literacy of the population, its ability to plan personal finances;

Protection of borrowers when communicating with banks, providing citizens with all the necessary information at the stage of concluding an agreement;

Preventing debt defaults and protecting creditors, including by collecting information, credit histories, increasing the effectiveness of collateral and collateral institutions;

Creation of a system of work with bad debts - collection agencies, effective judicial and enforcement procedures.

Let's take the same increase in the financial and, perhaps, legal literacy of the population, its ability to plan personal finances. No matter how many laws are passed, things will not get off the ground until financial literacy is taught in schools. It is at school, and not at the financial academy, because not everyone will get there. Everyone is already accustomed to the fact that our school very often loads children with knowledge that is too far from what they will have to face in real life, and at the same time does not form skills at all, without which it is quite difficult to manage in our everyday reality.

The borrower, if he had a certain financial culture, could well calculate the effective annual interest on his own, and he should do it, because bank employees, like all people, tend to make mistakes, if not in the calculation itself, which the computer does, then in input of initial data.

The reverse side of the legal support for the development of consumer lending is the protection of the interests of creditor banks.

One of the ways to protect their interests, as well as increase the responsibility of individual borrowers, is the development and simplification of the bankruptcy procedure for individuals as a guarantee of repayment of their obligations.

Until now, the bankruptcy of individuals is difficult to implement due to the presence in the civil procedural legislation of provisions that make applying to an arbitration court to declare an individual bankrupt practically unpromising in terms of debt recovery.

In particular, Article 446 of the Code of Civil Procedure of the Russian Federation provides for the inclusion in the list of property that cannot be levied under executive documents, residential premises and land plots, household furnishings and household items, livestock, and the like. Obviously, in the presence of these restrictions, the formation of the bankruptcy estate is problematic. And in this case, in practice, the bankruptcy of an individual, according to the current rules, is beneficial, first of all, to the debtor himself, as it allows you to write off most of the debts in case of insufficient funds from the sale of the seized property to pay them off.

The solution of the issues discussed in this chapter will increase the trust of the main subjects of consumer lending to each other, provide their legal protection.

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