In the present world where inflation and cost of living increases day by day, most business houses and entrepreneurs would be having high requirements for finance that too in an easily available and at a fast pace. Finance is the bloodline of any business. It is also very important for leading the life of individuals too. Not all possess enough liquidity to meet their own financial requirements. Hence most of them depend on external financial institutions for uninterrupted supply of finance and thereby achieving growth. There are numerous Financial loan companies. But prudence is to find the best and affordable loan company.
The first and foremost factor to be considered while selecting a best and affordable loan company would be the rate of interest. Ideally, the lowest rate of interest is always preferred.
As per the Autumn Economic survey published in Sep 2018, the country anticipates a growth rate of 1.5% in the coming years. Also, good economic growth and employment development measures are taken at present by the government. Construction of major investment projects is in progress. The current lending rates in Finland ranges around 3.00%
In a scenario where Interest rates are in a decreasing trend, it would be ideal to select a floating interest rate. In a fixed amortization schedule the principal is amortized in fixed amounts from the repayment installments, but the installment amounts would differ during each term of repayment. In the case, of-of annuity-based amortization, the amounts of principal and interest are the same. Based on the income flow of the borrower, one can opt for fixed or annuity based amortization products offered by lending companies. If the borrower has a fixed income he can choose annuity based. In the case of business houses where the income flow cannot be predicted fixed amortization can opt. Any amortization can be easily viewed online with the state treasury. Normally this option will be available on the website of the lending company itself.
The next important factor is the repayment period of the loan. Normally repayment period ranges from 10-25 years depending on nature of loan and age of the borrower in case of individual borrowers. A higher repayment period would offer more time for repaying the loan.
Also, the charges levied like processing charges, insurance, preclosure penalty etc should be reasonable and transparent. There should not be any hidden cost which would subject the borrower to hardships.
There should be options for preclosure without much loss for the borrower and once the liability is closed the borrower should be free from all kinds of commitments.
The above criteria apply for individual financial requirements like housing and personal loan. For business loans, additional features like availability of overdraft, bills discounting, Letter of credit, bank guarantee etc would be an added advantage.
Also if the loan company goes with collaterals like the stock of goods the borrower will have an additional avenue by borrowing against his immovable properties like building, machinery etc.
Availability of holiday period and concessions on processing fee, interest subsidies etc would be added advantage. Holiday period gives relief to the borrower in terms of concessional repayment of the loan during the initial period of business development when the profit or returns would be low or totally absent.
There are multiple banks and lending companies like Ekstraluotto are available in Finland. For loans to individual consumers, eligibility starts upon completion of 21 years of age. Application for the loan can be made online and the loan amount is also transferred online to the bank account of the borrower.
Business loan in Finland does not require security backing. For the development of SME units generally up to 70% of the project cost is financed. Hence one can select the lending company which offers a maximum of the project cost as a loan. Also if the project is delayed, there are loan companies which agree on to change in terms and conditions of the loan.
Also, many lending companies offer amortization free loans for business purpose. Normally in all the companies online facility for checking loan status, statements etc are available.
All the above points have to considered and compared before selecting a loan company for availing any loan facility.