Exchange rate fluctuations make serious adjustments to the lives of Russians. If just a few months ago you were thinking about taking money from the bank to buy a home, a car, or just household appliances, today the opportunity to get involved in a story called “Credit” no longer seems too attractive. To borrow or not to borrow from a bank?

The head of the scientific direction “Macroeconomics and Finance” at the Institute of Economic Policy named after A. E. T. Gaidar, Candidate of Economic Sciences Pavel Trunin.

Natalya Kozhina, AiF.ru: Pavel Vyacheslavovich, does it make sense to take out a loan now?

Pavel Trunin: Let's start with the fact that a loan is not an end in itself, it is taken for something, you should not get involved in this story to buy something that you do not really need. It is clear that if you were going to take out a loan in the near future, and you know that your financial situation will not worsen, then it is worth doing. But the economic situation is very bad now, and it is possible that the financial situation of the population will also worsen.

— Many people, trying to save their small savings or learning about rising mortgage rates, decide to take out a mortgage, is this the right step?

— The percentage will increase, at least in the short term. But a mortgage loan is usually taken out for a very long period (10, 15, 20 years), and if you expect to repay the borrowed amount throughout this period, then you need to understand that the current situation will not last forever , after some time the rates will still decrease. In this case, you can take out a loan, lose your job after some time and find yourself in a situation where you will not be able to service this loan. Therefore, from a formal point of view, with accelerating inflation and rising rates, a ruble loan actually looks attractive in the current situation, but it all depends on how confident you are in your personal financial well-being. Everyone's situation is different, and a lot depends on the amount of income and the size of the share (of your income) that you will pay on the loan. If you pay half your salary every month for a mortgage, then even a slight deterioration in the situation will critically affect your ability to service the loan.

— What will happen to loan rates?

— In a situation where the Central Bank raised the rate, while the dollar and euro continue to grow, it is possible that the rate will continue to rise, the value of loans will definitely increase. But I cannot give a forecast by how much, because when our national currency falls by 10% per day, it is very difficult to make forecasts, and no one knows what will happen in a week. In a month, we may find ourselves in a different economic reality, in which all the forecasts made before will turn out to be unrealistic. But you should always understand that a loan is a responsible financial decision, and an unstable economic situation is not the best time to make such a decision.

— Can banks raise lending rates for those who have already taken out a loan?

— It’s difficult to say for all loans, it all depends on the specific agreement. There are agreements with a floating rate, when it is tied to the key rate of the Central Bank or some other indicator. In some cases, there may be covenant conditions, i.e. if there is a sudden change in some parameters, the contracts may be revised.

— What should those who have a loan in foreign currency do?

— This is the most vulnerable category of borrowers in this situation, when the national currency falls several times and there is a high probability of default. In such a situation, it is usually more profitable for banks to restructure the loan, to agree on something with the borrower so that he at least to some extent continues to service the loan, so you need to try to either convert the loan into rubles, or discuss the situation with the bank and find mutually beneficial conditions .

— In order to convert a loan into rubles, without having money to pay off the debt, you need to take out a new loan, only now in rubles?

- It’s not so simple, if at the current exchange rate you no longer have the opportunity to service the loan, then you will not be able to service the new ruble loan, in this way you simply insure yourself against the fact that further payments will increase due to the fall of the ruble.

— So, it’s better to come to an agreement with the bank, in such conditions it will meet the client halfway?

— Let me emphasize once again that it is not profitable for the bank if you go bankrupt; it is more profitable for them to agree with you on some mutually beneficial conditions, for example, that you will take longer to repay the loan and thus your regular payment will decrease. As a rule, banks are ready for negotiations, this does not mean that they will go well, but in any case, they are unlikely to tell you from the doorstep that they do not want to discuss any options.

Today, the attitude of Russians towards lending has changed radically. If previously such banking services were treated with caution, now taking on debt obligations, both for serious reasons and without, has become a common practice. Proof of this is statistics, which say that more than 82 million Russian citizens have debt. At the same time, rapid growth of loans occurred in all segments: mortgage, consumer, commodity, credit cards. But this trend is also accompanied by widespread problems with debt repayment. In this regard, it is necessary to figure out whether it is worth taking out a loan at all.

Is it worth taking a loan: introductory information

We think everyone already understands what a loan is. It is not necessary to explain in detail that for the borrower this is a solution to material issues, but for the bank there is no need to profit from the provision of financial resources for temporary use. Many people call credit bondage. This opinion arises because the person who takes out the loan necessarily returns not only its “body”, i.e. the amount of the principal debt, but also interest, which is a kind of commission for the lender.

Others may object, because a loan sometimes really helps out in difficult times. So the burning question arises: is it necessary to take out a loan? There is no clear answer in this situation. Even expert opinions differ on this matter. One thing we can say is that the level of lending has actually increased. We are accustomed to using other people's funds in the absence of our own.

This dynamic is frightening, since not all borrowers soberly assess their financial capabilities before putting on this yoke. There are, of course, people who will think carefully, based on their strengths and the circumstances that have arisen, whether to take out a loan or not. And if the situation requires it, they will still resort to borrowing money from the bank.

But even cautious and sober-minded people may have problems with loan repayments. After all, no one is immune from: job loss, deterioration of the economic situation in the country, the outbreak of a military conflict, etc. Of course, we cannot look into the future, so we start from what we have today. In general, when considering whether to take out a loan, you need to consider many aspects:

• who wants to take out a loan (individual or legal entity);
• for what purposes is it taken;
• type of lending (consumer, mortgage, credit cards, refinancing, car loans);
• conditions of certain credit programs, etc.

As the article progresses, we will examine all these points.

Good and bad loans

American investor, financial coach and businessman, Robert Kiyosaki divided loans into: good and bad. Good debts are those that add money to your capital and improve your quality of life. For example, you are a legal entity and have a business that requires investment. If you can’t attract investors, you can take out a loan.

However, it is worth doing this if you have a clearly drawn up business plan, have calculated everything, and are firmly confident that you will not “burn out.” A good loan can be a mortgage loan, which is taken out for the further rental of housing. The tenant's rent will help you cover the costs of your mortgage. Bad loans are those that, on the contrary, take the last crumbs out of your pocket. Therefore, consumer loans, usually issued thoughtlessly, are considered bad.

Spoiled by consumer loans and their availability, we begin to live beyond our means, squander bank money, naively believing that the income will be enough to repay the debt. “In addition, this is beneficial in that the credit burden on the family budget is not so large if you make minimum payments. But I will immediately get something that I won’t be able to afford even in a few years,” someone will assure. But a loan is always a risky step.

Most Russians do not bother calculating the total overpayment. But in vain. If they had not been lazy, they would have been dumbfounded by the usury of banks, abandoned the idea, and avoided problems. Before concluding a deal, think carefully about whether you need to take out a loan now. Maybe you can do without buying some things? Isn't it more advisable to be patient and save some money?

Is it possible to take out a loan: site opinion site

We believe that the root of evil is not the lenders, but the overestimation of their financial capabilities by borrowers and the misuse of money by them. Having studied the advice of various experts and financially successful people, we have identified needs for which it is definitely not worth taking a loan:

• buying a luxury car. It no longer becomes a means of transportation, but a luxury item. This affects its market price. The car will be expensive. You will have to borrow a large amount. Banks will factor the risk of non-repayment into the rate. You will be forced to pay almost the maximum interest on the loan. In addition, you will be subject to surety/bond. An expensive car is expensive to maintain. Will you be able to bear such costs later?;
• purchasing a new phone or other device. You should not chase after models of smartphones and other gadgets that have just entered the market. Don't "see" advertising. A new product in any store will be offered at an inflated price. Once the hype subsides, the cost will drop noticeably. After six months, the price may be equal to the monthly payment on the loan taken out;
• trips, celebrations. The editors of our site recommend that you be careful when lending for events and entertainment. It would seem that what’s wrong with using borrowed funds to obtain intangible benefits? However, human emotions are one of the main problems associated with finances. A person who is unable to control his emotions will always be accompanied by difficulties, because... she will not be able to control how the money is spent. Soon the festive mood of people who took out a loan will be followed by frustration and anger at themselves for waste;
• dangerous operations, including plastic surgery. Banks generally try not to provide funds for such purposes. You risk your health and even your life by taking this step. Having lost your health and then your ability to work, how will you pay off your debts?;
• investment in securities. A loan for the purchase of bonds and shares has always been considered high-risk. The stock market is characterized by instability. In this matter, you should not even rely on expert forecasts or quote estimates made by professionals. Your contribution may become worthless at any moment.

Advantages and disadvantages of lending: comparison table

A loan makes a person dependent on the bank, which, in turn, tries to present such a service as an increase in their standard of living, an opportunity to quickly achieve what they want. However, having borrowed money from them, we return exorbitantly more, as a result of which the loan becomes not so much a joy as a burden.

Instead of directing our energy to self-development and other tasks, we throw it at repaying the loan, filled with fear of delays and fines. Since taking out a loan is definitely an overpayment, we lose more than we gain. And you can't argue with that. Modern slavery is not a literal shackle, but a financial shackle. Having said so much about the disadvantages of bank loans, it is not fair to remain silent about their advantages, because they exist. To clearly see them and decide whether to take out a bank loan or not, see the table.

Video: to take a loan or not

Conclusion

To summarize, we can come to the conclusion that taking out a loan will be justified if:

• the need for money is urgent, and there is no other way to find it;
• purposes of use are: business, education, emergency treatment, mortgage. By the way, in 2017 and 2018, housing loans became even more accessible. Rates and prices for real estate are reduced. In addition, various programs are being developed that provide for the availability of shares and the provision of state assistance to large families;
• you are an objectively assessing your financial situation, a reasonable and responsible person who does not follow the lead of first instincts and emotions;
• there is a stable income, the value of which is at least 10 times the amount of the monthly loan payment.

It is worth taking out a loan, and it will be an appropriate decision when the borrower carefully studies the loan agreement, is not lazy in making preliminary calculations and is not afraid to ask questions to bank employees.

Is it worth taking out a loan? What do experts think about this?

Very often in life one can observe situations when a person, on his own whim, without particularly needing it, runs to the bank to get a new loan to buy, in fact, a completely unnecessary thing for him. There are many people who become dependent on credit and can no longer imagine their lives without a new loan. But such financial illiteracy leads to sad consequences that promise serious troubles for the greedy borrower.

Do you need a loan?

Every literate person, before deciding on a loan, will definitely think a hundred times whether he really needs it at the moment, or whether he can somehow get by with his own resources. After all, when applying for any loan, a person automatically assumes credit responsibilities, failure to fulfill which can result in huge risks for him, and as a result bad credit history. Thus, before taking a loan, you need to take into account your total family income from all sources and calculate whether the loan will become an endless bondage for a person.

Of course, there are different situations in life when it is really difficult to get by without a loan. As a rule, such situations rarely occur. In most cases, people take out loans only because they can still afford it.. But here you need to understand that constant lending can, over time, cause a real addiction, which is quite difficult to get rid of.

There are a lot of reasons that push people to get a loan. This could be a wedding, a vacation, buying new equipment or treatment. However, here you need to understand that the reasons for applying for a loan from a bank should always be objective, and not due to the desire to keep up with progress or outdo your neighbor. That is, if a person urgently needs funds, for example, to study at a higher institution or to travel to a sanatorium for recovery, then it is difficult to say that this will be an inappropriate decision. But if a person who already has a good car runs to the bank to get a loan to buy a newer brand of car, this is, to put it mildly, too much. Especially if this borrower does not have sufficient income in real life. Wealthy people or simply financially literate citizens always calculate the loan in advance, based on their needs and capabilities. And the main thing here is that these desires always coincide with real possibilities.

How to avoid making a mistake?

In order to avoid making gross mistakes that are fraught with consequences, when applying for a loan, a person needs to weigh the pros and cons and decide whether it is really worth taking a loan. Or you can still do without it. And to do this, you need to understand what mistakes are most often made when making a decision about a loan. Well, in order not to repeat them, you need to use the following tips.

If you nevertheless decide to take out a loan and, therefore, find yourself in a difficult financial situation that has developed into a confrontation with the bank, then do not despair, our online lawyer will answer all your questions for free about your rights and obligations to the financial institution and help get out of a difficult situation competently and with minimal losses. You can ask your question in the form located at the bottom of the window.

Not all car enthusiasts have the required amount to purchase the chosen car model. The solution for many in this situation is car loans. But is it worth taking out a car loan? On the one hand, this is a real opportunity to divide a large payment into several feasible parts. On the other hand, during the time that the car owner is paying off the loan, the car may break down and the payments will not be cancelled.

Advantages of a loan agreement

• Banks often give loans without guarantors and additional collateral - secured by a new vehicle. This increases the security of your car loan: if you fail to make payments, you will only lose the car you purchased.
• Most banks require the borrower to obtain car insurance. This ensures that the machine stays on the road and functions perfectly.
• Thanks to the loan, you can choose from a large number of both new and used cars of varying prices.
• Many car dealerships have partnerships with banks. This will allow you to receive discounts and bonuses, low interest or even a zero rate when applying for a loan.
• A loan will help you buy a comfortable, expensive car with an average income.
• A variety of car loan programs allows you to choose the most profitable cooperation scheme.
• You can repay the loan early, restructure it, etc.

Disadvantages of car loans

• The overpayment on a loan over 5 years is on average 50% of the cost of the car. At the same time, cars are becoming cheaper every year.
• The amount of the monthly contribution can only change as a result of restructuring, which is quite difficult to achieve. This situation may arise if you have lost your job or are forced to pay, for example, for repairs or treatment.
• The bank has the right to increase interest on loans or restructure debt at its discretion.
• Applying for a loan requires time and effort: you need to collect documents, submit them for review, wait for a decision and sign a lot of documents.
• In fact, until the end of the loan payments, the car does not belong to you completely. You will not be able to give it away or sell it.
• For every day of late payment, a penalty is charged.
• Payments cannot be missed.
• While paying off the loan, with an average level of income, you will have to give up entertainment and recreation - travel, trips to other cities, excursions, holidays, etc.
• If you have not paid the debt, the bank may begin the procedure for alienating the property. As a result, the car owner may be left without a car and without money. Some financial institutions charge a penalty that must be paid even after the alienation of property. This is due to the fact that fines are not included in the loan body.

All penalties apply only to negligent payers. Such situations will not arise with borrowers who make payments on time and approach lending responsibly.

Lending pitfalls

• When purchasing a vehicle on credit, you need to take out a CASCO policy. The cost of insurance is approximately 8% of the cost of the car per year. If you were offered a special price or an interest-free loan at a car dealership, then you will not receive any benefits due to CASCO. You will also have to apply for compulsory motor liability insurance.

Each bank promotes the services of its partner insurance company. As a result, you may be offered a program that is not the most affordable in cost.

It is also worth considering that many banks provide a commission for opening and closing an account and its maintenance. This also amounts to several percent of the cost of the selected car.

• Buying a car with cash is more profitable than taking out a car loan. But often the car owner makes a decision based on the timing of receiving the car. If you save money, you can spend a couple of years, and if you take out a loan from a bank, you can start driving in just a few days.
• An interest-free loan in fact often results in high interest rates, expensive insurance, a short repayment period (no more than 2 years), and a 50% down payment. With such lending, the choice of car models is quite poor.
• Express loans, loans without income certificates and a down payment should alert you. Loans on the most favorable terms for the borrower are issued with proof of income, a decent down payment and full insurance.

When should you take out a loan?

You can safely buy a car on credit in the following cases:

• For business (for example, taxi). The car you use will bring you constant income and repay the cost of the loan.
• Sharp price increases. In such a situation, it is much more profitable to take out a loan and get a car now than to endlessly save cash.
• Solving the transport issue. This applies primarily to residents of the suburbs, where public transport runs irregularly or does not run at all (at night).
• Purchasing a unique car. You can take out a loan if by chance you come across a car that you have been looking for for a very long time: for example, a car from a limited edition that is not on sale.

A loan is also justified if:

• Your income is high, but you also spend a lot. You plan to repay the loan in a few months.
• You have a significant amount (70% of the amount) and take out a loan for a short period (a year).
• You have the amount to purchase a basic car. A small loan is needed to purchase an additional set of options.

We can draw the following conclusion: it is most profitable to take out a loan for a short time - this will allow you to avoid overpayments of many thousands.

When is a loan not needed?

You should think several times before taking out a loan if:

• You have the only source of income;
• The loan payment is equal to 30% of monthly income;
• You are buying your first car. The costs of car maintenance, repairs and fuel often come as a surprise to novice car enthusiasts.

To take out a loan, you must have a permanent job and an income that allows you to make required payments. All that remains is to choose a car and a bank with a suitable program. When preparing documents, carefully study each point, or better yet, consult a trusted lawyer about possible risks. Calculate the final cost of the loan, monthly payments and potential force majeure situations. In this case, the loan will be safe and will not cause you problems.