This article was created in November 2009, so the data presented here are outdated. However, the tips and recommendations are valid. Continue reading through to the end of the article and you will find the link to the new series on Best Bank for Housing Credit . See saltwaterconnections.org for further editorial
Today’s article aims to give you an overview of how to choose the best bank to carry out your payday loan .
As we know, the banking offer for the Crédito Mação product is quite diverse, the possibilities are seductive, which sometimes leads the bank customer to devalue aspects that influence the total charge of the Housing Credit .
Therefore, in order to clarify and facilitate the best choice, 7 banks were identified to be analyzed with regard to the Housing Credit offer.
For an egalitarian analysis to be possible, it is necessary to define base parameters for all banks, namely:
- Purpose : Acquisition of permanent own housing;
- Household : 3 people;
- Age of Proponents : 29 years;
- RANB (Annual Gross Income): 25,000.00 Euros;
- They do not have charges with other credits;
- Occupation of Borrowers : Various;
- Do not have Housing Savings Account;
- Subscribed Products:
- Financing amount : 120,000.00 euros;
- Valuation Value : 150,000.00 euros;
- Purchase / Write Value : 120,000.00 euros.
- Term : 40 years without capital shortage;
Well there seem to be many parameters, but in most cases there are many more than those identified.
Let us consider the following comparative tables:
THE 4 HEAVYEST PROPOSALS
THE BEST PROPOSALS
It is easy to verify that the bank that has the most interesting proposal for the stipulated parameters is precisely the Barclays bank, with Bank second and Bank BES third.
But should we be guided only by the value of the monthly installment plus insurance charges and eventual processing expenses?
Of course not. We must look at all the parameters, such as the spread (“bank profit”), life insurance expenses and whether such expenditure is only for one bidder or for both bidders and what the coverage and method of repayment in case of accident, housing insurance expenses and coverages and also with the introduction of Decree-Law no. 192/2009 of August 17, we can compare the Annual Effective Annual Rate ( TAER ) that returns the real cost of Housing Credit considering all expenses and products subscribed.
In the 3 best proposals, we can easily verify that although Barclays has the lowest monthly payment, it does not represent the cheapest payday in global terms because it has a 3.589% APR. BES Bank presents without a doubt a better TAER which may represent the best option. Yes, it may, because we assume that the TAER calculation method is correctly applied, however, there is still a lack of definition regarding TAER calculation. You should stay alert.
But we should not just be analyzing the previous parameters, let’s look at the costs until hiring;
Here is one of the points that penalize the determination of the Barclays TAER, the existence of a cost of 585.60 € until hiring.
Now with these figures I venture to say that Bank is probably the best bank to carry out a payday Loan . Despite the simulation in returning the TAER, we can easily see that the costs are lower than Barclays Bank and Banco BES . Therefore Bank reinforces its position and risk saying that it is able to take the lead in this ranking.
Well, but we all know that simulations are not 100% take into account, there are many other factors that will allow you to negotiate more competitive spreads and better conditions.
I believe that the bank that has the capacity to present an irrefutable proposal is the bank of always , that is, the bank with which the Client has been sharing all its income. I say this because it is this bank that has a better knowledge of the needs and capacities of the Client, therefore, it is the duty of informing the Client that will have all the interest in carrying out such transaction and in the best conditions. I even venture to say that I should advise the Client to question and ask other banks for the same financing and then consult the bank. Thus, it will allow an adaptation of the bank to the reality of the market for a customer of certain characteristics.
There are banks that fall asleep with Customers, it is necessary to wake up to reality.
Well if we start from this principle any bank of this analysis can fit in and take the position of leader. Let’s look at a small example.
Banco Crédito Agrícola presents in its simulation one of the highest spreads, however it is the one that has the lowest cost until hiring. Imagine that you could negotiate a spread equal to that of Barclays bank for the proposal of the Agricultural Credit , for sure that would be the best proposal of all.
I hope that this little reflection returned to all of you as a small case study, has provided the necessary tools to choose the best proposal for Housing Credit .
Here are a few tips to put when negotiating your payday :
- Does the benefit reflect the value of life and housing insurance?
- Can I look for cheaper Insurance abroad? Do I have penalties if I do this?
- What do I have to pay in addition to the monthly installment?
- Explain these expenses to me until hiring?
- Are the Evaluation and other expenses real or different from those presented in the simulation?
- What do I have to pay to decide whether to approve the Credit?
- Is it not possible to pre-approve certain parameters, so that it has no burden on the decision?
AFTER THE DECISION …
Do the conditions proposed after the decision do not match your expectations? Tips:
- Request the letter of approval where the conditions of such a decision will be described;
- Confront other banks with the letter of approval and the same questions;
- Please wait for proposal;
- Once you have the proposal go back to your bank to negotiate;
- Choose the best.