Recently, People’s Bank of China has further reduced the required reserve ratio (RRR), which favors the stock market to flourish. It is believed that quite many individual investors are getting interested in buying the stocks. However, the capital has been tied up not long ago whereas a few investors would consider loans for their investment purposes. But what everyone has to pay attention is that – while applying for personal loans, one should choose a suitable loan plan. If a right choice is made, one can save even more! Here on MoneyHero, there are three relevant hints for all of you!
- Does it depend on the monthly flat rate or the actual Annualized Percentage Rate (APR)?
A lot of people may have a question about loaning. They may wonder whether it depends on the monthly flat rate or the APR.
Everyone should bear in mind that the monthly flat rate only allows the borrowers to calculate the monthly interest expense, in which other costs in loaning are not included. If you are to compare the total expenses, it must depend on APR!
- Administrative cost
Usually, the larger the loan amount, the lower the interest rate is. In dealing with each application for loans every time, the banks are subject to the costs of processing with a lot of manual work for handling documents. Therefore, the banks would rather adopt a lower interest rate to attract more people to enlarge their loan amount. Lending once-and-for-all for a large sum of money sounds better than lending like more than 10 times bit by bit.
- Revolving Loan
As mentioned, if one borrows less, the banks would charge him or her more. Sometimes there are some of those who are in need of only short-term loans in case of emergencies. In other words, these people have only a few days to think of a solution. They are exactly the group of people who could consider picking up the revolving loans. The reason is that, as the interest of the revolving loans are calculated on a daily basis, the flexibility of the repayment period is much higher. Nowadays, for most of the personal loans in the market, the repayment period is set at least 6 months after the loaning. If one would like to repay earlier, one might be subject to early repayment penalty. Therefore, if you tend to apply for a short-term loan in case of emergency, you had better read carefully the terms and conditions for the loans to see whether early repayment penalty exists.
These days, we have helped you to compare various loan products in the present market. Take a personal loan at HKD$ 100 thousand as an example, to our discovery, the difference between the highest and the lowest monthly installment could be as large as HKD$1,323; whereas the difference in terms of the total amount of repayment could exceed 30%. *See the attached image. To sum up, when you consider applying for loans, it is a must for you to pay attention to all the hidden charges. Making comparison says all.
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