Whenever you are in a financial stalemate caused by a lack of money for certain unexpected emergencies or some inevitable future expenses, one of the most sought after and most effective ways to solve this problem would be to apply for a loan.
Are you looking for a loan?
Now, both banks and non-banking financial institutions are available to you anytime and any time you need funding for your issue.
Before you start to put together all the necessary documents to approve your credit, you need to keep in mind the true meaning of some terms commonly used in financial matters.
Terms and its meaning
For any credit you require, you will be charged a certain interest .
This is the amount of money that you have to pay so you can get the money your bank provides for a certain amount of time. The interest rate shows what percentage of the required interest is and which is always applied to the amount initially borrowed.
The effective annual interest rate (EAD)
The actual cost of contracting a credit, since it also takes into account all other taxes, expenses or insurance to be paid by the applicant. The formula for calculating this rate also takes into account the time period in which the credit is granted, but also the real value of money over time. In Romania, for some types of credit, banks are not required to mention to the client the amount of this rate.
Monthly credit rate
The amount of money the client has to pay monthly to repay the borrowed money.
Shows what was the amount of money originally borrowed.
Maturity / maturity rate
Represents the total payment for each month of the credit rate. The maturity of each installment is continuous in both the payment plan and the contract between the financial institution and the client. Credit maturity refers to the date on which the credit was fully paid.
generally represents the period of time at the beginning of the crediting where the client only has to pay the interest charged for the amount of money borrowed. This period is especially granted to investors seeking credit to give them a respite to put into use the object of the investment made.
Usually concluded at the time of signing the contract, and through it the financial institution provides the necessary information to the client about the entire credit period, the number of days, as well as the rates and amounts of money that he / she has to repay .
The type of credit in which the bank provides a certain amount of money to the user for a certain period of time. The customer can then use the amount of money to make payments or payments at any time, and can also return the amount used at any time during the entire period of the credit. Interest is applied depending on the amount of money used, and in the case of unused funds a non-use fee can be applied.