The commission is a one-time fee, but it can strongly affect the total cost of the loan. This is very important especially in the case of a mortgage loan, where large amounts are involved, which reach even USD 200-300 thousand. But what about cash loans. Can the cost of the commission also be significant then?
What is the commission for granting a loan?
What is the bank commission for granting the loan and does every bank charge it? The bank’s commission is nothing more than a one-time fee that the bank will add to your commitment. It is expressed as a percentage and calculated on the amount of the commitment given.
Bank fees for loans also include payments charged periodically, for example, those used for credit card or ROR account limits with working capital or overdraft.
Bank fees are standard operating fees, the purpose of which is to compensate the bank for the costs it incurs in connection with the loan disbursement. Their amount may vary depending on the total loan amount.
How is the commission charged for the loan?
The regulations do not regulate the amount of commission on the loan granted. Each bank can define it in any way, but so that the total costs are within the limits imposed on the banks, including by the so-called anti-usury act. It is calculated as a percentage of the sum of the loan allocated.
Do you need a different offer?
Loan amount 100 dollars USD 200 USD 300 USD 400 USD 500 1000 dollars USD 2,000 USD 3,000 USD 4,000 5000 USD USD 10,000 USD 15,000 Repayment Period 15 days 1 month 2 months 3 months 6 months 1 year 2 years 3 years
The actual Annual Interest Rate (APRC) for the online loan offer is 647.33%. Contract duration: 1M years, total loan amount: USD 3,000.00. The total cost of the liability paid in equal (annuity) installments: USD 281.33, the total amount to be paid: USD 3,281.33. The repayment is carried out in 12 equal installments. The calculation was made on March 30, 2020, on a representative example.
Minimum and maximum repayment period: min. 3 months, max. 10 years
Maximum APRC: 1,942.00%
Bank commission and its types
It is a mistake to identify the commission as a single fee, charged only when granting the loan. All credit fees and commissions can be divided into several types:
- commission for granting a loan – charged when withdrawing a loan to the client’s account or to own hands, possibly subject to crediting and adding to the principal and interest installments;
- commission for early loan repayment – early repayment of funds borrowed from the bank sometimes causes the lender to charge a commission to compensate for the loss of part of the interest in earlier repayment (it can be from 1 to 5% of the amount of principal repaid);
- commission for processing the loan application – charged less and less, identified with the preparation fee, paid by the client before granting the loan decision.
Commission on cash loans
Cash loans, which are usually short-term liabilities, will have higher commissions because thanks to this the bank can earn more on the liability.
Therefore, the cash loan commission can take a value from a few to even a dozen or so percent depending on the bank offer. However, it happens that the bank gives up this type of payment. In this case, the commission is 0%. These offers can be very beneficial, but they carry some risk.
What is the commission on a cash loan?
There is no unequivocal answer to the amount of cash loan commission, as it is variable and depends on the bank’s policy. Are you looking for a loan with the lowest commission? In that case, the following statement prepared by us will definitely help you.
Much depends, however, on the amount of the loan. For example, the commission on a loan equals 0% if it exceeds USD 15,000. dollars. In the example given by us, the commission at Bank Good Finance is already significantly higher, which is even a dozen or so percentage points.
Of course, this does not mean that the Good Finance loan will be the most expensive. Much depends on the interest rate on the loan, so when comparing individual parameters, it is worth paying attention to the total cost of the loan.