Cash and mortgage loan simulation – how to do it?

 

Credit simulation is part of the information package we should get when applying for a cash or mortgage loan. If we want to prepare a statement of commitment installments ourselves, we can use the online loan simulator.

 

Are you thinking of taking out a cash or mortgage loan and want to know what installments you need to prepare for? This is what credit simulation is for. It presents information on all costs related to borrowing money and statement of loan repayments.

Usually, we get a credit simulation with an offer, e.g. from an intermediary, a loan company or a bank. If we want to check the expenses related to taking out a cash or mortgage loan without moving from home, we can use the credit simulator available on the Bankort website.

Mortgage Simulation

Mortgage Simulation

The first step in creating a credit simulation should be to orientate yourself in the offer of banks. A mortgage comparison tool is used for this . Just select the value of the property you want to buy, the loan amount and indicate the purpose of the loan (e.g. purchase of an apartment or building a house) and repayment period.

The list of results includes information about the installment amount in individual banks, the commission charged and the margin on which the loan interest ratedepends . If you are interested in a full list of installments and parts of capital and interest repaid in them, it is worth using the loan calculator . We enter basic data (commission, interest rate) and receive a list of subsequent payments.

Cash loan simulation

Cash loan simulation

We can prepare a cash loan simulation in a similar way. In the first step, we check consumer loan offers . We will receive a ranking of the best proposals, with information about the installment, interest rate and commission.

In the second step, in the credit calculator , we create a simulation of the full repayment schedule. It is worth paying attention to one detail – in some banks the interest rate may be zero, and the entire cost of the loan is included in the commission. By checking the option “the commission increases the loan amount”, we will calculate the simulation for the case when the bank adds this cost to the borrowed amount, and then receives it “piece by piece” in subsequent installments.

Credit simulator – what should you know about?

Credit simulator - what should you know about?

The loan simulator allows you to prepare an initial statement of installments and is useful primarily when you want to know the approximate costs. If we are hesitating between repayment in equal installments and decreasing installments, we can use it to prepare a simulation for both variants. Let’s remember that:

  • The equal installment is less favorable – we will pay more for the borrowed funds throughout the repayment period. Its advantage, however, is the unchanged amount to be paid monthly (if the interest rate does not change), and the expenditure is initially lower than in the case of decreasing installments.
  • The decreasing installment is initially higher than the equal installment. This is due to the fact that we pay the same amount of debt to the bank in each payment and the interest is accrued on the remaining amount. Over time, debt decreases and interest decreases. The advantage of a decreasing installment is a faster repayment rate, and hence, a lower sum of interest paid for financing.

Credit simulation before signing the contract

Credit simulation before signing the contract

You should read the loan simulation particularly carefully before signing the contract. The bank or credit intermediary is required to provide the client with the so-called information form. In the part called “description of the main features of the loan” there is a specification of the principles and deadlines for repayment of the liability. The amount of installments, their number and payment dates are indicated there. In addition, the total amount to be paid is given, i.e. the sum of the funds paid out and all costs.

Information on the repayment method should also be included in the contract we sign with the lender. We remember that some types of loans, e.g. mortgages, are based on variable interest rates. The simulation we receive before the conclusion of the contract is based on the current rates. The bank may change this parameter in situations that are listed in the contract (e.g. when the market WIBOR rate changes).

Loan simulation during cash loan repayment

Loan simulation during cash loan repayment

The Consumer Credit Act gives us the right to request a free repayment schedule at any time. We can check in it how many installments remain to be paid and what the installments are (in what proportion they are interest, capital and fees).

If the interest rate on the liability changes, the lender should also provide us with an updated credit simulation. It should contain at least information about the installment amount.