LOAN COMMISSIONS: What are the most common?
We regularly talk about personal loans, what we use them for, and we also keep a regular list of the cheapest loans, every month. Today we have to talk about one of the most important elements of a personal loan, such as the fees that apply. These are important and we must have them clear before formalizing the loan, because in the long term they can be an extra cost that our economy will notice.
The world of commissions is wide and depends, to a certain extent, on each financial institution. This means that we can find loans with few commissions, or of little value, and others with higher impositions when it comes to returning the money. It depends on many factors, as we will see. Now we are going to see the most common commissions on personal loans.
A money that is charged by the mere fact of checking the solvency of the applicant. It is important for the entity to verify that, effectively, the loan is to be repaid in conditions. It is usually a percentage of the requested amount.
It is the commission that is established to carry out the necessary procedures to formalize the loan. Again, it is a percentage of the requested amount.
Without being a commission, it is a common expense that can be associated with that of commissions. It is very frequent that the financial entity needs that the loan contract be formalized before a notary, and this cost must be satisfied by the client. Obviously, given the cost that the notary may incur, we must know this detail beforehand to assess how much it costs us to formalize the loan, and whether it will compensate us for the effort.
Expenses associated with products or accounts linked to the loan
If we do not have a current account in the entity where we request the loan, it is very likely that one of the conditions for granting the loan is that of opening an account. In this way, the loan would be managed through it. There are more and more alternatives that do not require a bank change or open new checking accounts, but the possibility continues to exist. We must assess very well whether or not we should accept these conditions, bearing in mind that the current accounts we open may, in turn, have maintenance fees.
If it is the case that we are forced to contract a product with the same bank to grant the loan, we must also think, first of all, if we want that product. Second, if it is useful. For example, taking out insurance that frees you from paying dues in cases of unemployment, disability or death of the owner may be advantageous; hiring a pension plan may not be so.
Here are included different commissions such as, for example, late fees – which apply once the client cannot satisfy the agreed installments on time – or early redemption fees, which sometimes penalize us for this fact. This commission is usually a percentage of the capital and usually varies between 0.50% and 1%, depending on how much time remains until the end of the loan contract.