For consumer loans, the best solution is not to take them. Still, there are situations where one can hardly avoid them. And then every advice is expensive.
When looking for a provider of a new consumer loan to lend us the money, most applicants first visit the bank where they have an account. Here we fluctuate around 15% pa (annual interest rates). One should be careful to compare bids on a one-way basis only at the basic interest rate.
Another significant cost of setting up a consumer loan may be a more or less hidden fee or required insurance.
That being said, we are talking about the so-called APR (annual percentage rate of charge), which can be incomparably higher than the base rate.
In the course of repayment, the fee / penalty for early repayment of a part or the entire loan, or even the inability to repay the loan, may be very expensive. It pays to study more offers or have a free, independent selection procedure. It should be mentioned here two extremes that I can encounter. The lowest interest rate tended to 5% pa, the highest attacked an incredible three-digit number 100% pa!
If we are already in the stage of repaying the existing consumer credit, it is appropriate to test the possibility of refinancing.
If we have such loans (or even in combination with credit cards) two or more, so-called consolidation is worth considering. It can significantly reduce the interest burden and hence the total overpayment, possibly also monthly payment. Some banks also offer payment of fees related to repayment of existing loans with competing financial institutions.
It follows that consumer credit has a place in addressing the needs of most of us. However, as with every financial transaction, it is necessary to be very cautious. Do not take the first offer that comes to our hands. Make a selection procedure and then “cut it”. And not to forget the retreat plan. So be able to leave the credit field without losing the flowers.
Benefits of meeting an independent finance expert
- Non-binding and free consultation
- Find all energy saving options
- Settle administration in one place
- Discuss possible combinations you will save on
- Calculate multiple banking houses for easier orientation without losing your precious time
- Select the bank that best suits your requirements
- You do not have to circulate the banks and find out the differences and make a difficult analysis