Effective interest rate
Posted on Oct 29, 2000 08:15:27 AM
Financial authorities hope that this summer’s day between banks and borrowers will be born a new relationship – very honest. But it is hoped that banks will cease to cheat, obviously it is not necessary
Across the country, the clients of credit institutions hand over the nerves from the unjust, in their opinion, extortion. Complain about a conversation in the household to their individual bank becomes a tradition. And indeed, promote some interest, but in fact fleece (in the form of commissions, etc.) Other! Banks end up in interest rates announced by a variety of commissions – from fees for loan application and credit accounts to penalties for early repayment or, conversely, any late payment.
The gap between stated and actual rates of 30-50%. Lending under the sky-high 50-70%, in fact, the banal usury. “The borrower sometimes aware of the cost of servicing the loan only when it begins to implement the monthly payments” – confirms the head of lending to individuals of retail business TransCreditBank Grigory Ivashchenko.
New rules
From 1 July 2007 the situation changed. That day will come into force on the disposal of the Central Bank, which required banks to set in the loan agreement the full cost of loans – with all the additional fees. That is to open the real rate on loans.
And here, according to the deputy chief of lending to individuals RosEvroBank Jeanne Malofeeva, before a significant part of lending institutions will arise a dilemma – to reduce the real rate in a competitive environment to average level, or try to maintain the current level of profitability by finding new options for getting money from the borrowers.
What will the specific banks? While difficult to predict. Most prefer to carefully comply with the requirement of the Central Bank without any damage to the business. Output from the series “and keep the innocence and acquire capital.”
In particular this applies to those banks that offer the most expensive loans – the Express, cash loans without collateral and credit cards. The cost of these proposals is not in itself may be low because of high risks and the need for reserves.
The most likely scenario – the rejection of additional fees in favor of increasing penalties.
“This will maintain the appearance of low interest rates – said the senior vice-president Communication-bank Arkady Komyaginsky. – Banks will come up with various schemes to the borrower in any case, was forced to pay fines. In this case, to avoid them to very few people succeed. ”
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