Familiarize yourself with the loan vocabulary
The Good Finance loan glossary provides key terms in the field with explanations. The financial vocabulary for the unknown can be a jungle, where you should be able to navigate to get the right attention.
At least in terms of the nature of the loan, it’s a good idea to be careful about the loan that best suits your needs, as there are differences between loans and loans.
Do you know the difference between a continuous loan, a consumer loan, and a quick draw? Or who grants a peer loan? Read a loan glossary, get to know the subject, and know better what you’re looking for.
The annual percentage rate
The actual annual interest rate is perhaps one of the most important in loan terms. It tells the loan applicant the percentage of the most expenses associated with the loan and how much the loan will cost. The actual APR is calculated using a complex formula, but in practice it is a very necessary figure when trying to compare loans.
The nominal interest rate is the percentage of the interest rate on the loan and includes both the reference rate and the margin. It is a more precise definition than the borrowing rate. The nominal rate is the rate mentioned in the loan agreement, but it does not tell the whole truth about the price of the loan;
Credit opening fee
The opening fee is incurred when the loan is applied for and opened. It is usually a percentage of the amount of the loan drawn and must be included in the annual percentage rate of charge.
Total cost of the loan
The total cost of a loan is the amount that is to be repaid, ie the amount of the loan raised plus all costs and interest throughout the period of payment. Most lenders provide a loan calculator to help you estimate what the loan will cost before applying for a loan.
Creditworthiness refers to the ability to meet financial obligations, ie it can be estimated that the borrower will be able to repay his loan properly. Evaluating it is important for a responsible loan to be granted to the applicant.
A repayment-free month means that you do not have to pay down the principal of the loan when paying the one-month invoice. In short: only interest and expenses are paid. It is possible to introduce a truncation payment as an additional service.
A free month means you don’t have to pay a single invoice. That is, no capital or interest and expenses are paid. It eases in a tight month, but on the other hand, the loan is not reduced in any one month. The free month can be redeemed as an additional service.
Continuing loan usually refers to the available credit line from which you can withdraw money without having to make new loan applications. Repayments of the loan will be returned to the credit line for re-use. For example, a credit card is a type of continuous loan, as is Good Finance’s Good Finance Limit.
An annuity loan is a loan with a fixed maturity, but the installments of the loan vary with the development of the reference rate. First, the loan is mostly paid for interest before the principal is reduced.
Traditionally, a quick draw is a small unsecured loan with a short payback period. Nowadays, Quick Leverage can also be a credit line type of flexible loan from which a customer can make quick Leverage as needed. The payout time for new types of instant loans is considerably more flexible than for old instant loans.
A consumer credit is usually a credit of a few hundred or a few thousand euros, which is given in its name for consumption. Depending on the amount, this loan has a payout period of up to 5 years. With consumer credit you can be secured or unsecured. Good Finance’s Good Finance Loan is a unsecured consumer credit.
A flexible loan is the same as a continuous loan, a loan that you can draw at your own pace with your own flexible loan without having to apply for a new loan. There is a certain amount of credit line that can be used to withdraw money. Repayments release the lifting margin for reuse.
An unsecured loan is simply a loan that can be obtained without collateral or collateral. However, this does not mean that solvency is in no way checked. The loan decision is based on the verification of solvency, for example, through the Customer Information Electronic System or the submitted receipts. The application process is usually quick, hassle-free and electronic.