If we are going to borrow money without any collateral and allocate it for any purpose then the best solution will be a cash loan. The amount that can be obtained in this way starts from 500 USD. Consumers using this type of solution very often decide on a loan of USD 5,000 spread over 2 years of repayment. Let’s check where such a loan is the cheapest.
It would seem that it is enough to divide the amount of USD 5,000 into 24 parts, i.e. monthly installments repaid over 2 years to the bank to find the answer to the question of what the installment of our loan will be.
Unfortunately, this is not so colorful, because in addition to capital, i.e. this 5000 USD, you also have to pay back interest, commission, preparation fee, and even insurance, which is very often compulsory. And all these costs will be increased by USD 5,000, as a result of which the lender will receive much more than he lent us.
Depending on the bank, the cost of getting a cash loan may vary
Considering a loan of USD 5,000 spread over 2 years, the differences in the amount of monthly installments in different banks can be really big. What it depends on? Well, one bank charges a higher commission, another requires expensive insurance, and there is also the interest rate on the loan, which also varies between individual lenders.
The sum of all costs in individual banking institutions, i.e. the amount of interest, commissions, the preparation fee, and insurance will give us a clear answer as to where the loan will be the cheapest. Fortunately, we don’t have to add all these costs ourselves.
Thanks to the regulations in force in the European Union, each lender is obliged to inform about the amount of APRC (i.e. the actual annual rate of interest rate) in its offer.
This indicator takes into account all credit costs
So based on it we are able to determine which loan is the best. The higher the APRC, the worse the more expensive the offer is. A cash loan can also be obtained today in non-bank companies.
This solution, although it is definitely more expensive, can, however, be an alternative for people with negative history in Credit Information Bureau databases, which the bank has nothing to count on any credit. APRC of non-bank loans is even several hundred percents, while bank cash loans are only a few dozen.