Anyone who wants to take out a loan generally attaches great importance to having to pay as little as possible. The classic costs of a loan can be divided into two groups: interest and processing fees. However, most people know that they are always dealing with a loan without a processing fee, because the bank uses a nifty trick in their language.
The loan without a processing fee: This requires processing fees to be paid
But before we will talk about it, it should be briefly explained what you actually want to do without a loan without a processing fee, because it is important to bear in mind what processing fees are. Incidentally, they are often referred to as fees. First of all, these are funds that are about administration. When you think about it, most people quickly understand it by themselves: a loan incurs costs for the bank, because the loan must be closely monitored and the repayment must be recorded. All of this requires a certain amount of technical and human effort, which the banks can pay for through processing fees.
The loan without processing fee: the linguistic trick
The reason why many people do not notice this is due to the fact that there is rarely a question of fees when it comes to interest offers, but the banks offer two different interest rates: the fixed borrowing rate and the annual percentage rate. The bound borrowing rate is actually the interest in the actual sense, whereas the annual percentage rate also includes the fees. So if you think you are paying off a loan with an APR, you will quickly believe that you are paying off a loan without a processing fee.
The loan without processing fees: The “In the event that …” fees
The fact that it is not done is really problematic. Because you also pay fees when you make a change to the original loan agreement. For example, if you want to repay your loan early using a special repayment, you will quickly be confronted with the fact that this is associated with additional costs. The situation is similar if you want to vary the installment amount or duration. In this regard, many banks even offer insurance that will help in such a case, but of course make the loan more expensive overall.