Understanding Loan Terms and Conditions
Before we are signing any loan contract, you should read carefully a number of parameters indicative of the interest they pay and expenses that support the return of capital received.
– The first indicator of the rate of interest is the TAN – Nominal annual rate – usually expressed as a percentage, indicates how much you pay each year of interest (the interest is obtained by multiplying the capital for this percentage), and competes in the composition of the installment that you pay each month in the repayment of debt.
- A second and more important indicator is the APR (Annual percentage rate of charge), a difference of this parameter TAN incorporates all the charges laid down for the complete operation: inquiry, open practice, collection rate, insurance and interest, if you want to compare two or more solutions of loan proposals from different agencies will advise on equal amount and duration of extinction of the debt, to compare the various APR financing for choosing cheaper. When the term of repayment increases the Tag down (the costs are “coated” on a longer time, this index also decreases with increasing the amount required (the APR is a measure of the cost of financing).
Pay attention to those loans that are advertised with “Zero rates”, in fact, provide the costs of investigation (open practice – evaluation and management) and in some cases insurance costs to cover any defaults by the debtor (for cases occurring at a later time and for different reasons), are provided in case of debit installment of current account expenditure for the collection of each individual rate (usually between 1 and 2 euro) that the bank charges and is downloaded as the cost customer.
Many companies dealing with loans, the more respect the consumer, some try to “mask” the real conditions of the proposed financing does not sufficiently transparent, making the APR and the validity of the offer.
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April 2nd, 2009 at 9:12 am
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