Residential Loan Offer

In the diploma thesis, they set the following objectives: to research and define the concept and significance of credit, ** to familiarise themselves with the types of credit collateral, and to learn about the ** types of loans and ** collateral at bank X**. They found that a bank loan is still the most suitable solution for bridging financial difficulties. They found that borrowers would most frequently offer a mortgage on real estate as collateral for a loan in the case of purchasing the property. This is an understandable decision, as these cases involve larger sums of money and many can only obtain the amount of credit they need for the purchase in this way.

Problem

In the diploma thesis, they set the following objectives: to research and define the concept and significance of credit, ** to familiarise themselves with the types of credit collateral, and to learn about the ** types of loans and ** collateral at bank X**. They found that a bank loan is still the most suitable solution for bridging financial difficulties. Loans are taken out for a wide variety of purposes, not only for bridging financial difficulties.

Without credit, many people would not be able to afford a flat, a new car, let alone a holiday or some other commodity. Banks offer loans for various purposes, and the repayment period of the loan can be short-term or long-term. Banks are well aware that clients have great needs for various commodities.

In the loan offer itself, they want to approach the needs of customers, whilst striving to make these as innovative as possible. Banks, in their offer, naturally also take care of their liquidity, and it is precisely for this reason that loans between different banks are very similar, differing only in the lending conditions. In the competitiveness between banks, the Bank of Slovenia and the ** Banking Association** also appear, which prescribe rules, ensure uniform operations of commercial banks and at the same time limit them in their activities.

Every borrower when taking out a loan ** wants it to be the most favourable, but with every loan taken out, certain costs also arise. Before taking out a loan, it is necessary to read the entire content of the loan agreement carefully. We must pay great attention to the ** interest rate, as it can change quickly.

Thus, a loan that was favourable when taken out can quickly become unfavourable. Loan collateral is also very important. It is difficult to choose the most appropriate and most favourable form of collateral, and not all forms of collateral can be used for all loans.

The wish of banks is that every loan is adequately secured, as this protects them in the event of inability to repay the loan. Banks want the loan to be repaid regularly with monthly instalments, as otherwise they must collect the debt. Loan collateral protects both the borrower and the lender.

The borrower in the event that they will not be able to repay the loan themselves, and the lender by ensuring that the loan will be repaid in any case. In the diploma thesis, they set the following research questions, which they answer: RQ 1: Do borrowers most frequently offer a mortgage on real estate as collateral for a loan when taking out a loan for the purchase of real estate?

Results

They found that borrowers would most frequently offer a mortgage on real estate as collateral for a loan in the case of purchasing the property. This is an understandable decision, as these cases involve larger sums of money and many can only obtain the amount of credit they need for the purchase in this way. RQ 2: Is the interest rate the factor that most frequently influences the decision to take out a loan? Respondents most often chose the fact that they are clients of the selected bank, which obviously has a significant influence on their decisions.

The interest rate is in second place by frequency of circled answers, so we can conclude that it is among the important factors, but does not have the most important influence, as it was not most frequently chosen. The result can also be linked to the fact that in the town where bank X is located, there is only one competing bank. RQ 3: Do borrowers have a good knowledge of the entire loan application process? The surveyed borrowers mostly have a good knowledge of the process, twenty-two per cent even very good. The finding can be attributed to the fact that nowadays it is possible to obtain most information on the internet and other information sources before clients visit the bank branch.

A certain proportion of borrowers certainly already have previous experience with the loan application process. RQ 4: Do borrowers think that the process from application submission to loan approval takes place within the agreed timeframe? More than half of the respondents believe that the loan application process takes place within the agreed timeframe or is completed before the agreed timeframe, from which we can conclude that banks strive for the satisfaction of their clients and thus also ensure the loyalty of their clients. Given the set objectives, it is possible to conclude that they achieved them, as they presented in detail the operations of banks and the conditions that they set in the field of lending.

They partially confirmed the research question about the influence of the interest rate on taking out a loan, and through the analysis of the responses to the survey questionnaire, they arrived at affirmative answers to the research questions that investigated the decision to secure real estate, knowledge of the loan approval process, and opinion regarding the duration of the loan approval process.