If we want to take out a loan, it is best to choose one in installments. Currently, we can take out installment loans not only in banks, but also in non-bank companies. It’s a quick and convenient way to get extra money for any purpose.
When you take out an installment loan, you can often set the installment amount yourself to suit your needs and capabilities. A special calculator that allows you to calculate the cost of a loan can be used, among others, on our Cryobank website – all you need to do is enter the amount and the repayment time to find out how much you will have to pay.
The amount of the installment depends mainly on the amount that has been borrowed, as well as on the period in which we intend to give it back. However, these are not the only factors that affect the amount of the installment.
What makes a loan installment?
If we take out a loan, we commit ourselves to giving not only the capital itself, but also additional loan costs to the bank or loan company. These include mainly interest, commission and additional fees, including the preparation fee, for examining the application, insurance, if it has been redeemed.
Therefore, the loan installment consists of two parts, namely a capital installment and interest installment. The amount of the capital and interest installment depends on whether we have chosen a loan with fixed or decreasing installments.
Installment amount and interest rates and jabank
It is worth pointing out that the amount of the installment may change. This mainly applies to loans granted for longer periods, for example mortgage loans. Then the changes result mainly from the level of interest rates, and more precisely jabank.
If it is low, then the interest rate on the loan decreases, which means that we pay lower installments, whereas if interest rates and jabank go up, we also get more credit with them, which translates into the amount of the installment.
Foreign currency loans
If you have a currency loan, for example in Swiss francs, the amount of the installment also depends on the exchange rate. As a result, the installment usually changes every month because exchange rates are smooth and constantly changing.
How do you pay low installments?
If you want to take out a loan and do not want to pay high installments, remember a few important things. First of all, look for an attractive offer that will not be associated with high costs – look at this not only for the interest rate on the loan itself, but also for the additional costs that we have indicated above. We can also use the APY indicator – the real annual interest rate, which includes not only nominal interest but also additional costs. APY is helpful in comparing different loans.
Of course, the longer the repayment period, the lower the installments we will pay. Remember, however, that a longer repayment period means more costs, so it is more profitable to take loans for shorter periods. However, do not exaggerate with their amount so that they fit into our financial capabilities.