Everyone can have a life situation where they need a small or larger sum of money. If you can’t borrow from anyone and you have no savings, only one borrowing is possible. If you do not want to name your loan purpose when taking out a loan, free-loan loans can help you. One of the biggest benefits of a free use loan is that the loan amount can be spent on anything, without the need to have invoices to prove its use. When it comes to freelance loans, there are two options, one is the freelance mortgage and the other is the personal loan. Which of the two types of credit you are worth to borrow may depend on many things. Here are a few points to consider when choosing a loan.
There is only one similarity between overdraft and personal loans
Which is their usability. The loan amount can be freely spent on anything you want. Free-to-use loans help you get closer to fulfilling your dreams. You can use the loan to buy a car of your choice, travel to your favorite holiday paradise, or even renovate your apartment. When it comes to home remodeling, saving for a home may be a better option than a free-loan.
A freelance mortgage is basically a classic mortgage
Which means that you need real estate collateral to take out. As with any mortgage, the property is mortgaged, that is, charged to the loan amount. A home loan is different from a home use mortgage loan in that in the case of a home loan, use is, as it is in its name, only and exclusively for home purposes. The minimum amount of credit that can be claimed is usually HUF 1 million, the maximum may vary from bank to bank, but it is a great benefit of a free mortgage loan that you can get a higher amount.
In the case of a freelance mortgage, the turnaround time is 1-1.5 months. Administration is also complicated and requires careful attention. It is not easy in the field of documents either, it takes a couple of documents to record, which is why the process is delayed.
The biggest benefit of a personal loan
Over and above a freelance mortgage, is that it doesn’t require real estate coverage. In the absence of real estate collateral, income will be the determining factor in borrowing. It is important that you have a decent amount of income, because this will actually be a guarantee for the bank. The higher the income you can justify, the more favorable the loan structure will be. The process of getting a loan can be very fast if you have the right documents and meet the stringent banking requirements. If everything is OK with the bank and you will receive a positive credit review, you may have the amount of credit requested in your account within 4-5 business days. There are also credit institutions where you can cash in on the day of application. When you apply for a personal loan, you can start out with a couple of hundred thousand forints and usually have a maximum of 7 million forints.
At the moment, interest rates on overdraft loans are very low, around 4-5%, with an interest rate of 6-12 months. However, there are many who do not have, or do not wish to have, mortgaged real estate, or may just need a smaller loan, so it might not be worth the real estate. The great advantage of personal loans in terms of interest rates is that financial institutions usually provide fixed rates until the end of their term, so that the installment installment does not change, even if interest rates change.
Because personal loan rates are currently low
It may be a good alternative to using a mortgage for free. However, this is very much influenced by the amount of credit you want to apply for. You need to consider whether it is worthwhile to start a mortgage loan. Before you commit to borrowing any loans, there are also some start-up costs that can be very high for freelance mortgages . It should be borne in mind that, as with a home loan, there are costs other than the installment payment, such as valuation, mortgage registration, notary fee, property fee, etc. The amount of these can reach 90-100 thousand HUF . That is why it is worth considering not only interest rates but also APR, ie the Annual Percentage Rate when taking a loan. Some credit institutions may have promotions for start-up costs in which they release some or all of them. The initial cost of a personal loan is usually around 10-20 thousand HUF, which is significantly cheaper than a mortgage loan.
For a smaller amount of a couple of million forints, a personal loan is a good solution and you do not even need to mortgage the property, but if you need a larger amount and have a real estate to borrow, you might want to try a free mortgage. Use our loan calculator to select the most suitable loan to help you choose from the special loan offers from our banking partners.