At the same time, an open credit line requires constant attention and causes a lot of trouble for the borrower. It needs to be maintained regularly: paying interest and principal payments on strictly agreed dates. Late payments are fraught with penalties from the bank. In addition, they are necessarily reflected in the client's credit history and give it a negative tone.
If servicing the credit line does not cause difficulties, it means that an affordable loan was chosen. The main criterion of affordability is the share that loan payments take in the personal (or family) budget. It should not exceed 50%.
It should also be noted that issuing a loan in cash (as well as transferring funds to an account or card, followed by cashing out through a bank teller or ATM) is usually associated with paying a fee. The fee can be a few percent of the amount cashed.
The borrower also strives to get not only an affordable but also a profitable loan. The borrower's profit means a corresponding loss of profit for the bank. But this is a completely normal situation in a civilized market.
To obtain a benefit, the borrower needs to minimize his final overpayment to the bank. This can be achieved by choosing a product with an annual rate that is as close as possible to the minimum. The spread of rates on consumer loans is tens of percent, from 16-17 to 40 and even more. Some credit institutions indicate very low loan rates, around 1%. It should be noted that these are rates for one day of loan use. The annual rate is then 365%.
To reduce the interest rate, you can choose banking products denominated in US dollars or euros. The rates on them will initially be lower than on ruble ones. However, this would not be a very profitable loan. In the event of a sharp decrease in the ruble exchange rate, the costs of servicing the credit line may increase significantly.
A more realistic way to reduce the annual rate is to provide documentary evidence of your solvency (submission of a certificate of income) or to pledge liquid assets (real estate or vehicle) to the bank.
You can reduce the final overpayment to the bank (and ultimately get a profitable loan) in case of early repayment of the loan without penalties from the bank. Such a right must be specifically stipulated in the contract for the borrower.
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