среда, 13 июля 2011 г.

Interest-free loans - new scam

Find the answer to this question that drives turn to an analysis of two major banking programs offering interest-free loans. This installment (buying goods on credit) and car loans. We consider each of these options in detail. "Basic conditions of interest-free loan (term, application procedure) remain generally unchanged. However, the bank is not without its rewards due to him. In this way, only redistributed to the interest rate yield on the commission," - said Chief Financial Officer "ProstobankConsulting" Alexander Grizzly, The most frequently used one-time and monthly commission. Disposable commission is calculated on the loan amount (purchase).

For example, at the cost of goods in 1000 USD and a one-time commission of 20% in fact, the bank will have to pay 1200 USD. Monthly fee varies between 1-3% and is calculated on the outstanding balance or the full amount of the loan. Naturally, the second form of monthly payments is less favorable. In this case, additionally have to pay the bank in the form of monthly fees 12-60% per annum of the purchase price. Thus, the effective interest rate (total cost of the borrower) may reach 80% per annum and above. In addition to disposable and monthly commissions, in practice there are additional fees: the fee for consideration of an application for a loan and execution of its issuance, the monthly fee for maintenance of credit accounts and credit support, the fee for the loan in cash, commissions on transactions with credit cards, etc.

On the eve of holidays widely used interest-free loan scheme to include the remuneration of the bank in the future price. For example, the overvaluation of goods from 1000 to 1250 UAH. These 250 UAH and are the percentages that store (in fact the client) will pay the bank loan. Also, the borrower on interest-free loan offer to pay the first installment. When it comes to buying expensive items like cars, pay 10-20% of its value can not everyone. In granting consumer credit risk the bank is much higher than the mortgage or car loans, since loans are available with virtually no collateral. In this regard, Alexander Gray noted that "in recent years, many banks have switched to more risky lending, but also more lucrative. The effective interest rate on bank loans to express an average of 80%." In other words, the increased risk of loan default, including interest-free, increases the cost of banking products. To reduce the risks in some cases, banks require customers to pay the initial fee.

"On the one hand, reduces risks, and the other shows on the solvency and serious intentions of the client. As a general rule, the banks that charge a large one-time fee, do not require a down payment," - stated Gray. Here, however, the client can lie in wait for another trick. When paying a down payment accordingly reduces the size of the loan and interest thereon payable to the bank. While one-time commission serves as an instrument of income of the bank, confirming solvency of the borrower. But its payment on the loan amount is not affected. Therefore, other things being equal, more profitable loans with an initial payment than a single commission. We have already discussed the benefits of payments for goods purchased in retail outlets, with the use of credit cards, because the pay commission (about 2% of the purchase price) will be a seller.

The latter circumstance leads to sometimes unmotivated refusal to accept the card for payment. As for the car loan, then the corresponding range of bank programs have long been used in Russia. Among them: quick loans, buy-back (at the end of the contract or the borrower can pay the remaining cost of the loan and leave your car at home, or sell a car dealer at a predetermined price in the contract and purchase a new model), trade in (an old credit machines), factoring, loans for used cars, zero loans, auto loans with no down payment. Option-interest car loans provided to Russia several schemes. In the first case, the manufacturer or dealer when buying a car on credit to a borrower makes a discount, which equals the rate of interest on the loan. Thus, when buying a car worth 100 thousand dollars the borrower pays the bank the said sum, and a car showroom, offering a discount of 15 thousand dollars, they pay the bank in interest. Thus, the borrower actually interest-free loan will be. The second option - factoring. Car dealer gives the customer the opportunity to buy a car hire and assign its rights to the installment to the bank. The borrower pays in the cabin of the car price, the remaining amount paid in installments to the bank. Interest paid for the use of loan auto show, since he ceded to the bank debt (just received the money) and the service is required (factoring) to pay. In some cases the provision of interest free car loan payment increases of the insurance company with which the bank operates. The Ukrainian market for car loans so far behind a similar market in Russia for 1-2 years. This, according to Mr. Gray, to the fact that "this scheme are complex, and the risks are high.

In addition, the Ukrainian market, competition among banks is not so strong, and there is a simple mechanism to increase the attractiveness of automobile loans: increased credit term, a loan to buy a used / have cars, and others. "Thus, in most cases, interest-free credit is not other than good advertising. Moreover, the Law "On Banks and Banking Activities" to provide interest-free loans are prohibited, except as provided by law. By the way, Russia's Supreme Court has already recognized the validity of claims about the illegality of charging Rospotrebnadzor banks additional fees and fines when servicing the loans. From now on, the courts may deem illegal commissions and fines of almost all Russian banks involved in lending to individual persons. While it is often the commission and ensure the profitability of banks in interest-free loans.

Choosing a credit program, it is necessary first of all, read the terms of loans denominated in the contract. Moreover, before signing the document, rather than after. In this case, Alexander Gray noted that "interest rate - is the most accurate and honest way to determine future payments on the loan. As a general rule, those banks that use interest rates are cheaper resources, and they do not have to resort to various schemes to improve visual appeal of their products "- summed up the Grizzly. Analysis of core banking software (and car installments), which offers interest-free loans, showed the following. The most profitable loans, where the emphasis is on interest rates. For example, a small interest rate and one-time commission. Or, interest-free loan and a one-time commission (19%). More expensive are those banking products that use the monthly fee. The effective interest rate on these loans can reach up to 80%.

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