“Do you know how much you will have to pay for the credit?”

08102020

Surely, you often heard the phrase: “the lowest percentage rate.” Sounds good, but not always the lowest interest rate guarantees us and the lowest price of credit. The first thing you need to know before taking a credit is that it does not only involve the interest rate, but also other additional fees, such as: administration fee, origination fee, loan assessment fee, etc. All together they increase the final cost of credit.

To make a responsible decision, it is important to know the method for calculating the cost of credit, the repayment period, and all commissions and additional payments. All these constitute an APR (effective annual interest rate). This information should not be missing from the contractual documents, and the credit expert has to communicate and explain it, if necessary, before signing the loan agreement. We also recommend that you request graphs with similar terms from different creditors to compare the total amount for credit services provided.

Take into account all the commissions related to the credit, so you know how much you will pay.

Let’s talk in more detail about interest and commissions. Taking credit involves paying interest rate, which can be floating or fixed, and commissions. Experts recommend credits with fixed interest, which will remain unchanged throughout the term of the lending. Besides the interest rate, there are also related commissions: loan assessment fee, early repayment fee, late payment fee, etc. It’s good to know all of them, but also what extra payments they entail.

At Microinvest, in the case of loans for individuals, you only have an administration fee. As a responsible creditor, we always explain all the credit costs before proposing to sign the credit agreement. We also offer our customers the opportunity to calculate the cost of credit themselves by accessing the credit calculator on our website.

To avoid all the problems generated by too high rates and possible default, we recommend you to take into account the following tips from Microinvest, in collaboration with MFC:

  1. Analyze several offers to make the right choice. Compare the associated costs, from interest to commissions, conditions, procedure, and credit period. Also consider other important factors such as: the reputation of the institution, rapidity, and flexibility in granting loans, customer reviews.
  2. Ask to be informed of both the effective and nominal rate to objectively compare the lending conditions offered by different companies. The more informed you will be about all related payments, the more reassured you will be that you have made the right choice.
  3. Draw attention to the term of the credit. Credits for a shorter period have a lower interest rate and vice versa. Also, ask to inform yourself about the possibility of paying off the credit in full ahead of schedule.
  4. Avoid special offers and unclear credit conditions.
  5. Do not choose the cheapest credit. REMEMBER: the lowest nominal rate does not imply the lowest cost for credit.

CONCLUSION: do not hesitate to study all credit conditions, compare several offers and analyze the interest rate, commissions, and additional payments, to know what will be the total cost of credit, how much you will pay monthly, and also for what you’ll pay more or less.

Microinvest, as a responsible creditor, in collaboration with the MFC, is ready to help you with all the necessary information to make the most correct decision and borrow wisely. Turn your credit into an advantage.

For more information, check out Privacy Policy or write to us at sesizari@microinvest.md.

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