358
A consumer and mortgage loan involves issuing money at a certain percentage for a certain period of time. Their differences consist in the amount of the mandatory payment, the size of the down payment, and the final terms of the loan. It is possible to decide what type of lending is best, taking into account each situation.
In fact consumer credit is an alternative to obtaining a mortgage loan. It may seem that these bank products are practically indistinguishable: they offer relatively low prime rates, large loan amounts, and the optimal loan repayment term. However, it should be noted that the differences are quite significant!
As experts say, a consumer loan will be much more profitable than getting a mortgage. The main fundamental advantage is the absence of the need to wait for bank accreditation of the desired real estate object.
It is worth noting that the buyer himself will be directly responsible for the complete legal purity of the executed transaction. Since the bank does not approve the main transaction, it will not check its legality. Unlike a mortgage, a consumer loan is provided without collateral. If a very large amount is required for the purchase of real estate, the subject of the pledge may be immovable or movable property, which may be valued at a suitable amount.
Mortgage features
Having taken out a mortgage loan, you can immediately start living in the purchased property. The amount of this loan may exceed the amount of the consumer loan. Although the interest rate on the mortgage is increasing, it still remains lower than on other credit programs. In addition, mortgage lending is provided for a longer term than when issuing a consumer loan, so monthly payments are not so burdensome.
Features of consumer credit
People who already have a certain amount to buy real estate, but still need about 10-20%, should think about a consumer loan. It is noteworthy that the borrower does not need documentary confirmation of the purpose of obtaining the loan.
By taking out a consumer loan, a person can avoid certain losses, which is noted when receiving a mortgage. For example, the client must necessarily insure life, confirm his own capacity for work, and also insure the purchased ready-made real estate object, which, by the way, will belong to the bank to a certain extent until the mortgage is paid off.
Сonclusion
The answer to the often-arising question of which to choose is a mortgage or a consumer loan is purely individual. This will be affected by:
• does the borrower have the basic cash in sufficient quantity for the purchase of the real estate object;
• is the client confident that he can plan his life for many years ahead and make it financially secure;
• whether the client is ready to share his property directly with the bank, or wants to become the sole owner of the property.
You can choose for a long time, but it is better to contact a specialist who will determine the optimal lending scheme!
