One of the costs of a cash loan is the commission that the bank charges from us for the mere fact of granting the loan. Unfortunately, many borrowers do not even pay attention to the amount of commission when using banking services.
This cost can reach even over 10% of the borrowed amount of money. It is easy to count how much it will be, and thus how much more should be paid back to the bank in addition to borrowed capital and interest.
The cost of a cash loan (or cash loan) depends on four factors
Which include the nominal interest rate on the loan (i.e. interest), preparation fee, insurance, and commission for the bank. The nominal interest rate may not exceed four times the current Good Finance rate of the National Bank of Poland. In recent years, it is at a very low level, so banks are not able to earn much on interest, which is why they charge large commissions.
The amount of commission on a cash loan depends on the amount of the loan taken by the consumer – it is a certain percentage of the capital raised. Sometimes you can see how the bank reduces the nominal interest rate as part of the promotion, but raises the commission and as a result, the loan costs us the same.
The banks inform about the amount of commission in the fee table, so everyone can check at what level this particular cost of the loan is. In addition, very often (e.g. in advertisements) you can meet a representative example provided by banking institutions.
It should also be borne in mind that the commission is often calculated individually for a given loan application. The amount may be influenced by factors such as the loan amount, loan period, the bank’s internal credit policy and even insurance.
When looking for the best cash loan offer for ourselves
We should consider all four factors affecting the cost of the loan, namely: nominal interest rate, preparation fee, insurance, and commission.
Therefore, in the European Union countries, a loan cost index has been introduced, which takes into account all these components, specifying the total price of each loan on an annual basis.
I am talking about the APRC, i.e. the actual annual interest rate. Thanks to this value, we are able to compare different loan offers, reducing them all to a common denominator.