Don’t you want to go to the bank to deal with a case because you don’t always understand financial terms? When reading the contract, do you feel like you are not in Hungarian? It’s over now because we’ve gathered the most common foreign terms and abbreviations you can use to apply for credit.
Concepts related to the most important Personal Payday loan
Total Loan Rate (CPM)
You have heard of this, as it is imperative that this value be included in bank advertising. But do you also know exactly what it means? The total cost of the loan shows the value of the loan. The percentage of the total cost of the loan taken in relation to the total amount of the loan. So the APR shows how much you need to pay back over one year in addition to the principal. Banks have been using the full rate since 1997.
The THM contains the following items:
valuation and on-site inspection fees,
property registration fee,
the fee payable to the credit intermediary,
fee for possible bank account management.
Certain costs are not taken into account by credit institutions when calculating the APR. Such costs may include:
the default interest.
All in all: if you want to compare the terms of a Personal Payday loan, the THM should be the primary indicator you look at!
Extension of the term of the loan. You can then see if you change your credit agreement, for example, and you want to extend the term because you want to pay less.
reference interest rate
The interest rate to which other interest rates are adjusted. Such reference rates include the central bank base rate determined by the Monetary Council of the National Bank of Hungary. Reference rates include BUBOR.
Reference interest rates are worth paying attention as they may affect the rate of credit interest rates: if the base rate starts to increase, credit and deposit interest rates will also increase, which in practice means that your monthly installment will also increase in the case of a floating rate loan. The same goes for the opposite: if the base rate decreases, your repayment installments will be lower. If you choose one of the fixed rate loans, you do not have to keep these changes even if you change one of the reference rates.
Base Point (BP)
In the financial field, this unit represents 1 / 100th of the percentage point. So one base point is 0.01 percent and 100 basis points 1 percent. The term base point is most commonly encountered when it comes to interest rate changes.
Credit Coverage Index (HFM
This indicator also helps the debt brake system. Determines the amount of credit that can be taken in proportion to the coverage (eg home value). Currently, the maximum credit available under HFM is 80 percent for HUF based mortgages. This means that if you want to buy a 20 million forints property, you can buy up to 16 million forints.
The period during which the interest on the loan does not change. This means that you can calculate a fixed loan rate within an interest period, you don’t have to worry about the variable size of the installment. Interest rates are set by the bank for long-term loans. The most common periods can be three, five or ten years old. There are no interest periods for loans with fixed maturity, but you pay the installment on the basis of the same interest rate.
Compare the loans to find the best deal!
Today it is natural that before buying a household appliance, we read its parameters and compare it with other similar products. Why not do the same with financial products? The easiest way to do this is by setting up a Personal Payday loan calculator to determine how much credit you would like to take and how long you would like to repay it.
In order for a financial calculator to always be able to calculate accurately, we use the data contained in the bank notices.
What do you need to know about announcements?
There is little drier reading in a financial service announcement. However, as they seem dry, they are at least as important as these documents include the features of loans, bank bills, and other banking products:
the exact name of the product,
how long it lasts,
the product terms,
So practically everything that can be important during the loan application and the term. Notices are required to be displayed by banks on their website and made available to customers. If there is a change in any of the products, the bank must update the announcement and in any case make it clear which notice is in effect.