When taking out a loan from a bank, especially a mortgage, we have to take into account the necessity of paying high commissions. This significantly increases the cost of borrowing money. Why do banks charge various types of commissions? For them, it’s quite an attractive income.
According to Credit Checker data, in 2017 over 15.3 million Poles repaid bank loans and loans on the non-bank market. Banks and credit unions granted a total of 7.2 million consumer loans and 204 thousand. housing loans. Added to this is money borrowed using credit cards or account limits. All these products have one thing in common – the need to pay various commissions and fees.
Commission on the loan – what do you have to pay for?
When taking out a loan, you should pay close attention not only to its interest rate. Commissions of all kinds are also becoming an increasing burden. These are one-time fees that are charged by the bank when paying out the loan. However, we can also include cyclically charged fees.
What do we really have to pay for when taking out a loan? First of all, banks charge commissions when paying out a loan. Sometimes this fee is cut off from the funds transferred to the borrower’s account, but it is also added to the installments (amounts repaid monthly are higher).
Added to this are various commissions and fees associated with servicing the loan. Usually, the bank calculates them for credit cards, personal account limits (especially when these limits are exceeded) and for loans paid in tranches. You can also often find a commission for examining a loan application, for the valuation of a real estate as collateral for a loan, insurance fees, etc.
Why does the bank charge a commission?
Many borrowers probably wonder why there are so many commissions and fees when using the loan. The answer is simple – it’s about the lender’s income. Low-interest rates, as well as restrictions introduced by the so-called The anti-usury act meant that the interest rate on loans was low. In addition, banks must compete with each other, so they can not raise interest rates. Various commissions and fees are a way to increase the financial institution’s profit.
Thanks to them, banks can flexibly shape the price of money according to their needs and the actions of competitors. It is thanks to the calculation of commissions that more and more zero-interest loan offers appear on the market. Banks can afford it because they get money from fees.
Financial institutions can earn commissions quite well. Their amount depends on many factors, such as the type of offer and loan, the amount of margin, interest rate, purchase of additional products by the customer (cross-selling), etc.
Can you get your commission back?
It is worth knowing that there are situations in which the borrower is entitled to a refund of at least part of the commission paid. It is primarily about early loan repayment. According to the interpretation of art. 49 of the Act on consumer credit made by the Financial Ombudsman, in the event of early repayment of a consumer loan, all possible costs of such credit are reduced, irrespective of their nature and regardless of when these costs were actually incurred by the borrower. According to this interpretation, the cost reduction should be proportionate.
Unfortunately, the problem is that not all banks have accepted the above position of Good Finance and the Financial Ombudsman. As a result, it is not always easy to get your commission money back. Banks are trying to explain that these fees cover the costs of servicing a given loan. However, it is difficult to conclude that it may cost tens of thousands of dollars because such a commission for example for housing loans is not uncommon.
However, the borrowers come to the aid of courts, which more and more often share the opinion of the Financial Ombudsman and the President of Good Finance. Therefore, if the loan has been repaid earlier and the bank refuses to reimburse you, it is worth settling the case before justice.
You don’t even have to face the bank in court alone. Companies like ours help to recover the commission due. Specialists analyze each case thoroughly, and then lawyers specializing in financial law start working. After losing the process, the bank will have no choice but to return the commission.