How much do you pay too much for your loan?

Loans come in all shapes and sizes, this also applies to the interest that is charged for borrowing money. You can probably save a lot of money on expensive, long-term loans if you transfer them. Certainly if you are dealing with a sharply decreased interest rate after you have taken out the expensive loan.

Comparing interest rate differences can save money

Comparing interest rate differences can save money

To take out a loan you do not always have to go to the bank, or other financial institution, where you have been a customer for years. You better compare the interest of different loans and credit providers with each other. You will soon find out where you can take out the most advantageous loan.

Refinancing expensive loans

Refinancing expensive loans

Moreover, you can pay off many loans in one go with the money of a cheaper variant. However, you must bear in mind that you immediately terminate the expensive loan to prevent it from being registered with the CKP. To be able to take out a loan you must:

  • Find a lender who wants to borrow money for you cheaper. The lender will check if:
    • the requested loan matches your personal situation,
    • the loan matches your income and expenses,
    • you are registered with the CKP.

If you are known to the CKP as a defaulter, the lenders will usually not be willing to borrow your money.

Co-financing a loan in a mortgage

Co-financing a loan in a mortgage

You can sometimes transfer a loan to a second mortgage and pay less interest. The interest on a mortgage can be lower because the property serves as collateral. However, financial institutions will be reluctant to provide a second mortgage.

Avoid credit cards and are in red

Avoid credit cards and are in red

A credit card is very easy, but it also comes with a number of disadvantages such as: the balance must be settled in time to avoid high interest payments. Standing in red is built into almost every payment account and can be useful if you occasionally need a little more financial room. have. Hundreds of euros in red every month costs a lot of money. It is better to take out a cheap loan to repay such expensive forms of credit.

Points for attention when transferring

Points for attention when transferring

If you want to refinance a loan, you should pay attention to:

  • the amount of interest,
  • the conditions under which the loan is granted, such as
    • is extra repayment possible?
    • what happens to the loan if you die?

Costs of various loan forms

Loan form Characteristics Interest rate
Personal loan
  • fixed interest,
  • fixed and short term
  • depending on the market interest rate,
  • on average between 6 and 10 percent
Revolving credit
  • fixed maximum loan amount,
  • interest payment on withdrawn sum,
  • fixed monthly repayment period
  • fixed percentage of principal,
  • on average between 6 and 10 percent
Red on a checking account interest payment on withdrawn sum, 12 to 15 percent on average,
Credit card
  • annual fixed contribution,
  • interest payment on withdrawn sum
  • depending on the loan agreement
Deferred payment
  • sometimes free,
  • sometimes fixed or variable interest
  • depending on the loan agreement,

 

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