When taking out a consumer loan, it is worthwhile to precede this activity with a reliable analysis of its costs. In addition to the APY indicator, Wibor is also crucial. Under this mysterious concept, there is a reference rate on the basis of which banks set the interest rate. Wibor 3m or 6m - which is better?
The banking market is governed by a complex system of laws and mechanisms. Although many of them may seem quite complex and complicated, it is worth being aware of the basics. This will allow not only to better understand, for example, the credit sector and its functioning, but also be better prepared in the face of incurring this obligation.
Consumer loans are benefits that, in addition to the actual amount of money borrowed, contain a standard fee dimension. Their type, way of calculating, the amount and frequency of collection is legally regulated, but not all concepts enjoy widespread recognition.
Interest - this concept seems to be clear. Similarly with a commission that functions not only in the sphere of the financial world. However, when talking about APY or WIBOR - many consumers may face a problem deciphering these terms.
Today we will focus on characterizing this second concept. So what is a vibration?
The term Wibor is an abbreviation of Warsaw Interbank Offered Rate. This is a unique indicator for the Polish financial market, by means of which the reference interest rate of all loans granted in our country is determined.
In other words, the height of the Wibor parameter shows the maximum percentage at which banks are willing to lend money among themselves. Such transactions occur regularly, mainly of course between larger and smaller entities.
What is the significance of the consumer?
If Wibor is an indicator concerning mainly internal processes in the banking market, what is its significance for people taking out consumer loans? Well, consumer loans are most often loans taken in zlotys with a variable interest rate.
The amount of the variable interest rate is not fixed rigidly. Sometimes it happens that banks offer customers the option of choosing Wibor rates in two tariffs - three-month or six-month. Usually, however, most of the outlets stop at offering either one or the other.
And here comes the concept of a vibrator, which in the context of the interest rates of many bank customers has already met in the form of "3M vibrator" or "Vibor 6m".
When comparing the two types of vibrations appearing in the context of taking out a loan, the period of interest rate update must obviously be taken into account at the beginning. In the case of 3m vibrations, it happens every three months, and in the case of 6m vibrations - every six months.
Considering these different times of updating the rate - which will be a better choice? Everything depends on changes on the financial market related to interest rates. If their value drops at a given moment, then the vibration 3m will be safer.
This is due to the fact that it is updated more frequently, which reduces the interest costs of the given mortgage. It is an advantage that comes from borrowing with variable interest rates.
However, if the time comes for the market to increase the interest rate on loans - then, the situation changes by 180 degrees. Then the 6m vibration is the more optimal choice, because it changes less often. This allows you to keep the loan costs at the current level until the update, which may sometimes come after the "calming down" of the situation. As a result, the 6m vibration can allow you to wait out the unfavorable economic climate.
Wibor 3m or 6m - it never has a golden mean
The global financial crisis of the end of the last decade has shown that the financial market is far from stable today. Therefore, forecasting long-range forecasts is usually pointless, as it is difficult to predict accurate behavior, for example in the interest rate sector in a few dozen years or so.
This time dimension is not accidental here. Most consumers take loans for many years, paying off in many installments. This means, therefore, that the chances for extreme fluctuations in the financial market to pass interest rates are more than likely.
In other words - during mortgage loans it is difficult to expect that the choice of the 3m or 6m parameter would bring continuous benefits. At the moment, they can be noticeable, but not much later - the customer may lose.
The issue of choosing the vibrator parameter should be based on a response to the current situation on the financial market. Currently, for example, the vibrator drops, so the 3m parameter will be better. However, there are many economists' opinions that the financial market may break down in the near future. Then, the situation may be reversed. So there is no golden mean. It remains cool calculation, adequate risk assessment, consult a competent adviser and luck.