Maximum – the annual overpayment is lower, but the total is higher. The monthly payment and financial burden are less than with the maximum term.
There are types of lending for which the longest and shortest financing periods are not relevant. For example, a mortgage can hardly be issued for 1-2 years - only a small part of borrowers will be able to "pull" such a monthly payment. But a consumer loan can hardly be issued for 30 years - even if you have to pay, for example, 500 rubles per month, the borrower will have to repay the debt for too long.
To calculate the loan term, take your monthly income and subtract the amount of current and potential mandatory expenses from it. Try to anticipate all expenses. Then determine a comfortable "insurance" amount, and then subtract it from your income. The resulting figures are the maximum allowable monthly payment. Accordingly, you jordan mobile database should choose a period that will help you achieve payments in exactly this amount.
The borrower can change the loan term either upward or downward. In the latter case, we are usually talking about early repayment - if the agreement provides for such an option, then you can return the principal amount at any time, taking into account the accrued interest and reduce the amount of overpayment.
There are at least three ways to extend the duration of a contract:
Use credit holidays - pay little or not pay the loan at all in agreement with the bank. Relevant when the financial situation and living conditions worsen. The maximum term of credit holidays is 6 months.
Restructure debt - increase the period of use of money and, as a result, reduce the size of the monthly payment.
Refinance a loan - borrow money from another bank to close the current unfavorable loan. Usually the procedure is carried out in order to reduce the interest rate, but it is also possible to further reduce the monthly payment by increasing the term of use of the money.
Please note that in the absence of valid reasons, the bank has the right to refuse the client a credit holiday and debt restructuring. Therefore, it is worthwhile to take care of collecting a set of documents in advance confirming the impossibility of making monthly payments according to the schedule. However, banks often meet clients halfway and introduce restructuring procedures.