How much does a consumer loan cost you? - Not just installments and interest. Disbursement commissions and penalties for late repayment
In addition to repayment of installments and interests, obtaining a consumer loan is associated with a number of other costs, including commissions that the client must pay to the bank or non-bank financial entity. According to data from the Bank of Albania, the most common commissions applied by non-bank financial institutions are penalties for late repayment, disbursement commissions and commissions for early repayment of the loan.
The same types of commissions, but with different percentages, are also applied by banks. Unlike non-bank financial entities, where the disbursement commission or the late payment penalty is applied to only some of them and not all, in the case of banks, these are the commissions that are always applied and by all of them for consumer mortgage loans.
When a citizen takes out an unsecured consumer loan, i.e. without a mortgage, from a bank, the disbursement fee is replaced with an administration fee.
It should be noted that some of the largest non-bank financial entities in the country apply zero commissions for the loans they provide.
Citizens turn to banks when they want to obtain large consumer loans, while the entire process of applying and approving the loan is long and bureaucratic. On the other hand, non-bank financial entities offer consumer loans in smaller amounts, but approve them faster than banks, and this is because these entities aim to attract clients who are usually excluded from commercial banks because they do not meet the criteria set by the latter.
For customers with higher solvency, banks are willing to provide consumer loans in high amounts, while individuals with lower solvency or who simply want to get a small, quick loan and avoid lengthy procedures, usually turn to non-bank financial entities.
However, if you are considering taking out a consumer loan from a bank or non-bank financial entity, you should also carefully review and compare their interest rates.
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