The purpose of non-purpose loans is growing. Last year, financial institutions provided 50% more non-purpose loans than a year ago. Why is this credit product so popular?
The answer is to increase competitiveness. Falling interest rates have made loans more competitive and have become realistic alternatives to loans for which security needs to be offered, such as real estate. Since there is no need to include collateral in the transaction, the loan application process is very short, we usually accept it within a few days and can use it for anything. In addition, there are more and more popular online non-purpose loans in the world where the entire application process is carried out online from the moment the application is submitted to the pictorial identification of the applicant. We can get the requested amount within a few hours.
Although interest rates have become more favorable, it is worth noting that in the case of longer maturities, we will repay much more than the amount of our income during this period, so that the purchased item will be much more expensive than the original price.
First of all, we should try to ask only for the amount we really need. In any case, do not demand a higher amount. Let us strive for the shortest repayment period, which of course means a higher monthly payment. If we do, it is good to explore what is worth buying from a non-purpose loan.
We can say that it is not profitable to buy electronics, such as a laptop with a repayment period of 5-6 years, because the computer will still pay, while the product will become obsolete and will not reach a fraction of its original value, let alone price plus interest.
Renovation of the apartment is a reasonable use of a non-purpose loan
Therefore, it is necessary for finance from a non-purpose loan to a thing that creates added value. It can be a home renovation because the value of the property will increase, we can enjoy a more comfortable environment and in case of sale we can either sell at a higher price or we can sell the apartment faster. The second thing is that the cost of building materials and the cost of labor are rising, so we would pay the amount we pay for interest anyway at increased cost.
Replacing an old car with a newer, safer, and more economical car is also an investment to consider. Before we keep an old, more fuel-efficient car that can go wrong at any time, we can calculate how much we can save by buying a new car that consumes 2-3 liters less fuel, which will not break down in the next five years etc.
We can also mention the financing of the medical examination or the annual preventive examination. Apparently everyone knows that such tours are not cheap, their price is around 400 USD. Yet we can say that investing in our health is still worthwhile. It is possible that a preventive check will detect a problem that can be cured in time, thus preventing long-term incapacity for work, which would cause us to lose much more income than the cost of a preventive check.
If we have high incomes, we may never need a loan. But unfortunately most of us are not so lucky. Therefore, it may well happen that at some point in our lives we will be forced to apply for a loan. If this happens, it is not the end of the world. We have to rebel and carefully choose the best deal. The best solution is to visit a comparison page, to help us choose the best deal. If we have found it, we must be modest and ask for what we really need and what we will be able to repay. If we do so, we can be sure that you will not overstate the loan, and we will look forward to the things we have purchased from the borrowed amount.