Things People Don’t Understand Credit Commitments

Credits and credit are often the things that people do not think about on a daily basis, either because they have not received sufficient financial education or simply do not pay such attention. But ultimately, taking credit and living on debt should mean all that credit institutions offer you, as well as all the terms and concepts associated with these credits.

Credits and credit


Interest Rates – One of the main things people really don’t understand is the interest rates on credits and what the Annual Interest Rate means. In essence, the annual interest rate is a calculation made by all the creditors, and which expresses the percentage of the loan interest that a person will have to pay over the year. GPL rate of 10% means that around 10% of your loan will be overpaid within a year, and 100% of GPL means you will have to pay 100% of your loan over the year. It is precisely the misunderstanding of these rates that has created a situation where lenders can use people and impose high interest rates on their services, but because people do not really understand them, they can still attract customers.

Provide Credit Holidays

Provide Credit

The GPL rate is the key figure you need to look at when you want to get a credit because it will show you how much money you will have to pay, so taking the next credit will definitely pay attention to that size. Variables of the same percentage – With long-term loans, you will often have the choice between variable and equal credit interest payments, where the equal payment is usually much higher. The truth is that with good economic indicators, the floating interest rate is much lower, but as soon as the economy falls into recession or the bank has any problems, the rate is raised and often outperforms. At the same time, choosing a flat rate for the entire loan repayment period will require you to pay the same interest and therefore you will be able to count on these payments and their predictability.

Loan Combination


Credit Holidays – Credit Holidays is a term that is often mentioned when choosing a study loan, but in fact, this type of loan is available for most loans if only the bank is ready to provide you with such a service. And, contrary to what people are talking about, these credit holidays do not mean a complete interruption of credit payments, but usually mean the delay of repayment of the principal for a few months, but the credit interest will still have to continue to pay! Such a service, where credit payments will not be made at all, is rarely offered and is usually called full credit holidays, but most likely if you see this term, it will mean a vacation from repayment of the loan principal. Loan Combination – Another thing that people usually offer is a combination of loans where lenders offer to combine several smaller loans in one large loan so that the customer does not have to pay several loan payments, and that interest payments are the same and usually lower. The combination of loans is usually used directly by combining several short-term loans, such as fast internet loans or several credit cards, but this service is usually offered only in a dead end, when the total amount of loans has already become too big!

Penalty charges

Penalty charges

Banks and non-bank creditors often do not understand the penalties for outstanding loans as well as when these penalties are withheld. Often, penalties are levied directly on non-bank sector representatives, where 1% or 2% of the total amount of credit is withheld for each day of overdue credit payment. But bankers also add penalty interest in various cases, ranging from faster credit repayments to fines for loan restructuring and non-payment. That’s why you must always be careful and read everything written in the loan agreement! As you can see, there are various things that need to be understood about credit, and these are certainly not the only ones, so be careful and ask the creditor for any incomprehensible term or word to explain it, otherwise refuse to sign the contract.

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