About Good Finance Loans
Here is the home loan season, due to bank settlements and the booming home market, I get a lot of questions about home loans. Therefore, I apologize to the readers who are not (fortunately) affected by this topic, but the amount of questions shows that many people do.
I have long wanted to write about Good Finance loans, look at its advantages and disadvantages, and dispel some misunderstandings. As Good Finance cut interest rates this week, this is a great time for me to write about it.
Home savings fund that has invested heavily in home loans for a few years
There are three credit products, it is important that we can distinguish the three.
The first is the traditional loan offered by every home savings fund that is offered to customers after the savings.
So if you have a 4 year 4 month home savings fund, you can apply for this loan after it expires. Choosing a 10 year maturity after 10 years. (Term can be changed by contract amendment. More on Home Savings in the Large Home Savings Fund Summary)
The amount of credit you can take out in this way depends on the amount of savings and the type of construction you choose. For example, if you raise $ 1,312,000 over a four-year period with a maximum monthly savings of $ 20,000, you can get an additional $ 1.9 million in additional credit.
In this case, the loan will be repaid within 4 years 9 months at a monthly rate of HUF 38,512.
The amount and duration of the loan also depend on the duration of the savings
After a 10-year savings of HUF 20,000 a month, you can borrow $ 4.7 million for 7 years and 3 months. (Everyone already knows that it is worthwhile to save a home with the shortest possible term, because that’s where the highest yield is possible. If not, here’s the article.)
The interest payable depends on how much interest we received during the savings period. If more, the interest on the loan will be higher, if less, it will be lower.
And a common misconception: There is no 3.9% basic loan! It’s just a squirrel blind, for suckers.
In fact, the small print reveals that there is also a management fee, and tricky, at the beginning of the year, to pay the current debt in lump sum.
This trick was used by many banks before the crisis, now others have usually quit.
So let’s forget about 3.9%, the best APR for these loans is 5.43-6.32% according to Good Finance’s calculator. That is your real cost, the rest is just ad text. And there are better deals on the market for 5 and 10 years at a fixed interest rate. (The APR, or APR, will tell you the true cost of your loan. Forget about interest, as you can see, it’s easy to manipulate.)
The advantage of Good Finance loans is that interest rates do not change during the term, but other loan products are aware of this. The disadvantage is that the amount you can pick up is very low and the maximum maturity until you have to repay it. (The amount can be multiplied by concluding several contracts if we can enter into such a contract with our direct relatives. Unfortunately, we cannot do anything with the maturity.
A further disadvantage is that the debtor is required for less than 400,000 monthly income, but the age of the debtor is not investigated. For other banks (with the possible exception of OTP), the age of the older debtor matters, which maximizes how long a loan can be taken. (Although you don’t want to pay a mortgage even when you are 65, no matter what your bank would otherwise allow. You know the golden rule: if you can’t repay the loan in 10 years, you want to borrow too much.)
This was Good Finance’s best loan
Unfortunately not a very good offer in the current interest rate environment, especially considering the limited size and duration of the loan. It is much more convenient for commercial banks to take a fixed rate loan for 5-10-20 years at an annual interest rate of up to 4.99%. (One example: a fixed rate of 4.99% for 10 years)
However, if you need credit later, 4-6 years from now, it may be easy to get that interest by then. In this case, you might want to start saving as this will ensure that you will get a loan at such rates in 4-5 years. (As I said, all four home savings banks know this, not Good Finance’s.)