Do you want to spend Christmas at a cheap plastic tree, surrounded by great gifts from a Vietnamese market? A lot of people long for Christmas, so don’t hesitate to get some financial injection. What is the danger of a Christmas loan and how not to choose it next to it?
Knowing the credit market is not easy. It is used by reputable companies and unfair providers whose services border on usury. If you do not want to end up with a loan with APR of 1250% (yes, such companies also appear on the market), compare the prices of individual loans with us. With our comparison, you can see immediately how much different companies will lend you.
Compare loan prices
Why is it worthwhile to be annoying when choosing a loan? A Christmas loan can be associated with the risks described below.
There may be huge differences between the prices of individual loans. When choosing a loan, look not only at the amount of interest, but also the total charges (APR). We scoured the market and found that you can get a loan with an APR of 10%, or even 1450% – which is quite a significant difference.
How much can you overpay on a loan? Let us illustrate this with the example of Mr. Pavel, who decided to borrow an amount of USD 20,000 for Christmas gifts with a maturity of 2 years. The table shows how big the differences can be in different companies.
|Amount of monthly installment||How much will they overpay?|
|Firm A||909 $||1186 USD|
|Company B||1656 USD||19 774 USD|
It means that Mr. Dan would pay almost the whole amount. He borrowed USD 20,000 but would have to return almost USD 40,000.
Provisions in the contract
The borrower usually has to sign a multi-page contract with a number of terms and conditions. However, the client does not always read the document to the end, which is a big mistake. The contract can also read such things as penalties for late repayment of the loan. Some companies have hundreds of crowns a day. For example, if the client borrows 7,000 USD, the contract has a penalty of late payment of 500 USD / day and the payment is delayed by 15 days, only paying fines 7500 USD, which is even more than he borrowed.
Some less fair providers may charge a fee in advance for the loan. For example, a person in need will see an advertisement for a bargain loan. For example, he wants to borrow USD 20,000 and the company tells the applicant that his / her loan application was successful. However, in order to get it, he has to send a fee of several hundred crowns (even more in the case of higher loans). A trusting client is pleased that a company has finally accommodated and willingly sends the money.
However, this is a fraud, and the client usually does not encounter either a loan or a fee. A reputable company never wants any fee in advance – it automatically counts the fees for providing the loan to the amount of its installments.
Loan to the house
It does not have to be a delivery to the house. Many companies offer this convenience, thanks to which the client can get a loan without having to go to the branch in person. Solid companies allow the client enough time to read the contract thoroughly. The less fair tend to encourage the client to sign the contract as quickly as possible, “these are just such formalities, Mr. Wills.” If you choose a home loan, do not rush to sign the contract and read all the terms of the contract thoroughly.
How to choose a secure loan?
How to make sure your Christmas loan is a profitable decision and not a mistake that will keep your hair going long afterwards? Follow the Safe Lending Rules:
- Always read all the provisions in the contract. Do not sign a contract unless you understand all the terms.
- Get an overview of the usual amount of interest and APR on the market. Price comparison will help you find out what are the current prices for granting a loan.
- Check the credibility of the lender. Focus on how you communicate with your clients – whether you understand everything they say to you on the website for information. It also does not harm the internet to find out the opinions and experiences of people who have used the services of this company.
- Do not use loans from private individuals. A private individual is at a higher risk of unfair terms, and the ways in which he or she can recover money may be sharper than those of solid credit firms.
I don’t have money for gifts and I don’t want to borrow
What to do if you do not have enough money for Christmas gifts and you do not want Christmas on debt? Even in this case, you do not have to spend poor Christmas holidays. Just buy quality gifts in the lower price range. How to do it? The solution can be Chinese e-shops, in which you buy goods literally for the mouth.
Another option may be buying a few little things, and promising to buy gifts after Christmas. You give your family members self-made vouchers, such as a new coat, cell phone, or other product that you can buy with them during the Christmas sale. Not only will you save a lot of money, but also choose gifts exactly according to the taste of individual people.