1 | In order to choose a loan the interest rate is not the only datum to take into account.
In addition to the cost rate you have to add additional costs and insurances, which results in the total financial cost (TFC). This TFC is the loan´s real financial burden and the different institutions´ offers should be compared based on this datum.
2 | You may choose between a stable interest rate in the long term (fixed rate) or a rate periodically variable (variable rate). In the case of the latter, the customer should know which will be the adjustment parameter.
3 | If the institution charges management expenses, you should analyze the costs and how they are applied (percentage of the installment, percentage of debt balance or fixed amount, etc.)
4 | In accordance with the same criteria, you should also analyze if the institution charges granting expenses.
5 | If the loan includes taking out a life insurance, you should analyze how the institution charges such expense. According to the law, the client has the right to choose between three different insurance companies.
6 | You should take into account that if the loan holder is a final consumer he should pay VAT on the interest paid monthly, and this surely shall be reflected on the installment.
7 | If the loan provides for early termination, whether partial or total, you should know the costs of early termination.
8 | Some financial institutions force their clients to acquire additional products along with the loan (saving account, current account, and credit card). Upon making a decision, these costs should be added to the installment.
9 | Many financial institutions offer advantages to their clients with the ´salary account´ opening. Such benefits should be considered when comparing institutions.
10 | All the conditions informed by the financial institution when offering a loan must be stated in the contract. In order to avoid signing provisions that the client is not aware of, he should examine the contract carefully.