Take out a loan – the bank talk
Anyone who relies on so-called external financing in the form of a loan to bridge financial bottlenecks or make a purchase will find it difficult to avoid a bank conversation.
Because even in times of internet loans and online loan applications, the bank talk is a central element of lending. The preparation for this bank conversation is an important step towards a successful loan application and should be taken accordingly.
First thoughts in advance of the consultation – determine your loan needs
Before the counseling session at the bank begins, it is important to clarify important basics for the loan application. Above all, the actual credit requirement (i.e. the amount of money that is required) is an important cornerstone for a successful bank conversation in the course of borrowing.
As a rule, the actual loan requirement can be calculated using very simple means. For example, if the loan is to cover the purchase of a certain good, the actual purchase price is the basis for calculating the loan requirement. From this value, you deduct the funds that are available in the form of equity. The difference between equity and purchase price ultimately represents the loan requirement.
- Determine your actual loan needs.
- Take your financial situation into account.
- Calculate the desired installment amount and loan term.
Basically, when determining the credit requirement, it is, of course, advisable to measure it generously so that ultimately there is really no financial bottleneck. But keep one thing in mind. The higher your loan requirement, the harder it might ultimately be to get this loan amount in the course of the consultation.
So calculate realistically and with a view to your financial possibilities and try to estimate even before the consultation, with which monthly repayment rate and over which period you could repay the desired loan amount.
Prepare documents and make an appointment
After you have determined your actual loan requirements and have a first rough idea of the loan term and monthly installments, it is now time to agree on the actual date with the bank and prepare all the necessary documents for the consultation.
Basically, you hardly need any documents for a loan application from your house bank. Your bank knows who you are and what your financial situation is. Nevertheless, it is good form to bring an official and valid ID document (passport or ID card) as well as proof of income from the past three to six months. You should, therefore, take these documents with you directly to the consultation to shorten the decision-making process.
You should prepare the following documents:
- An official identification document.
- Proof of income for the last 3-6 months (payslip)
- Possibly offers and offers regarding the goods that are to be bought using the loan.
In addition, in the case of so-called earmarked loans, it may be necessary to present purchase documents. If, for example, you want to use the loan to finance a car purchase, then it is an advantage to bring all the relevant purchase documents (e.g. an offer overview from the dealer, etc.) to the consultation.
In this way, the bank can get an initial overview of the value of the property and possibly rethink the loan decision based on this data in their favor.
Negotiate loan terms and actively save costs!
And then it starts the consultation in your bank branch. The first thing to do is to convince the bank advisor of your loan request. Speak clearly about the facts that have already been determined. Name the loan needs in clear numbers and not vague dimensions. An example of this would be “I needed 5,000.00 USD for …” and not “Well for that and I could need about five to ten thousand.” In this way you create trust and at the same time show that you have made clear thoughts about your loan request to have.
Important conditions are:
- The installment amount and loan term.
- The possibility to suspend installments free of charge.
- The possibility of early payment of the loan amount.
- The opportunity to top up the loan at any time if required.
Now the bank advisor knows what loan amount you have in mind. The next step is to round off this information. Show your advisor that you have given careful thought to the repayment procedures. Name possible installments and the desired loan term and – if available – name possible loan collateral or people who would be willing to sign as guarantor for the loan.
Negotiations on loan conditions enable:
- An advantageous and cheaper return on the loan.
- An individual adjustment of the loan to your personal circumstances.
- The possibility to explicitly compare individual loan offers.
If you have done all of this, the basis for the loan application has been created. Your bank advisor will now inform you about the general options and possibly introduce you to the first loan options. It is important to talk about the loan terms at this point. Ask specifically for modalities regarding the amount of the installment, possible installment breaks in the event of unexpected financial bottlenecks, interest and loan fees.
If you negotiate talentedly at this point, you can save costs and receive a better offer. Because the conditions of a loan are only set in stone at first glance. Many banks are quite willing to adapt to them individually. So take the opportunity and try to set the conditions so that you fail in your favor.
Compare loan offers with the bank
You should not only talk to your advisor about opportunities and options, not only with regard to the loan terms. Because not every loan is identical. Not every offer is equally beneficial to your financial interests. A direct comparison of individual offers is always worthwhile and it is absolutely justified.
Of course, your bank advisor would like to fulfill your request and present your employer with a degree. Nevertheless, a direct comparison of individual offers together with the bank advisor is an advantage. Whether these are offers from other banks or several loan options from your own bank. Discuss all the advantages and possible disadvantages with your advisor and find the perfect loan for you. Because yes, the consultation is not just about the possibility of lending, but also about basic information that is important for you as a borrower.
If you pay attention to the small print, you will avoid nasty surprises
In the best case, you will already receive a loan approval after all the necessary information has been clarified and documents have been checked. It is exactly the moment you were hoping for and yet you should not blindly sign what you have in front of you.
You should pay attention to this:
- Read the fine print of the loan agreement in peace.
- Question unclear clauses and sections with your advisor or lawyer.
- If necessary, use the Austrian consumer protection service to have the loan offer checked.
Read the fine print in the loan agreement! This is the only way to find out whether the agreed terms are really met. You will also learn important peculiarities such as taking out insurance or similar measures – which are quite common for loans. Take the time to do this, gladly once a few days to read the technical Chinese, which is sometimes very difficult to understand, and to collect possible questions. You can then clarify these in further discussion with your bank advisor.
Do not sign the loan contract despite the lack of time until all questions have been answered and you can be sure that the loan will meet your expectations. Because although there is a right to withdraw from loans, everything should be read and understood before signing. So you are on the safe side and can finally fulfill your wishes and needs with the loan without worries.