If you want to take out a loan, you naturally want to borrow money as cheaply as possible. Before you take out a loan you will have to compare the lenders. It would be a shame if you had to pay more for your loan while it could be a lot cheaper. When comparing the lenders you will not only have to look at the cheapest loan, but do not forget to include the conditions when you start comparing. And do you want to take out a personal loan or a revolving credit?
Take out a cheap loan
Put first if you are going to borrow money this always costs money. So it would be better to save money in advance instead of borrowing money. But in practice it often works differently and not everyone has a few thousand euros in their bank account. So you want to borrow money and this should be done as cheaply as possible. You have to ask yourself, how much can I borrow? Because most people, when they are going to borrow money, prefer to receive the money in their bank account as quickly as possible, they often forget to look at where you can take out the desired loan as cheaply as possible. But where and how can you take out a cheap loan?
Tips for taking out a loan
To take out a cheap loan you will not have to make the mistake of taking out the loan with the purchase of your new car, boat or fridge. In that case you pay a high interest rate in most cases and this is precisely the largest cost item of your loan. An example is the interest that you pay at a mail order company when you purchase on installment. The interest rates are much higher at these companies.
Savings? Don’t borrow!
If you have savings yourself, it is not advisable to take out a loan. You pay more interest than you would receive in your savings account. Only in case you want to borrow money for a very short period and you would get a fine if you withdraw your savings for this, is borrowing money cheaper and wiser.
We all want a low interest rate on our loan …. but take a good look at whether this low interest rate applies for the entire term or whether this is a temporary offer. If the low interest rate is temporary, then in many cases you will still have to spend a lot of money on your loan.
When looking for a cheap loan you will have to compare the lenders. When comparing, make sure that the lender is affiliated with the AFM. And if you want to take out a loan via the internet, it is best to do this at a well-known large lender. Also always request multiple quotes if you want to take out a loan.
Transfer existing loan
If you have a loan, you could see if you are cheaper with another lender. If this is the case, then you should read the terms and conditions of your current lender and see if you have to pay a fine and, if so, how high it will be if you switch. Often the fine is not that high and it is profitable to repay the current loan and take out a cheaper loan. Whether it is advisable to retrofit your existing loan therefore depends on the interest you pay now, the conditions and the term of your loan.
Terms of the loan
When taking out a loan you must read the conditions carefully. Some points that you should definitely check carefully are the following:
- How much interest do I have to pay on the loan and does this change in the interim?
- Am I dealing with a fixed interest rate or a variable interest rate?
- Do you pay off the loan or do you only pay the interest on the loan?
- Do you have to pay a fine if you want to pay off the loan earlier?
- Can you shorten or extend the term of the loan?
- Do you owe closing costs as soon as you take out the loan?
Close the correct loan form
When taking out a cheap loan you will have to take out the correct loan form for what you need the loan for. If you are going to buy another car and want to borrow money for this, you will have to take out a loan which you will actually pay off. The car for which you take out the loan will also be worth less and less. It would be very annoying if the car has already been written off and you are still paying off the loan.
For example, if you have a temporary balance, it is best to take out a mini loan and want to borrow a larger amount with more flexibility than the revolving credit is the solution.
Type of interest
You pay interest on a loan. There is, however, a difference between the interest forms. You can take out a loan with a variable interest rate or with a fixed interest rate. Do not take out a loan with an entry interest rate These loans have a low interest rate at the start of the term, but this will increase further.
If you take out a loan with a flexible interest rate, you do not know in advance whether you will take out a cheap or expensive loan. The interest will fluctuate and since the interest is the largest cost on a loan, you do not know these costs in advance with the flexible interest.
With a fixed interest rate you know in advance where you stand. So when you take out the loan you already know what the total interest on the loan will be. With a fixed interest rate you have more insight into the costs of the loan and therefore more security.
Don’t borrow too much
If you are going to take out a loan, only borrow the amount you need. Certainly if you want to take out a cheap loan, it is important to never borrow more than necessary. Because you also have to pay interest on the extra amount, which means that the loan will only become more expensive.
So to take out a cheap loan you will be able to use the tips above. Fortunately, taking out a loan has become a lot cheaper in recent years due to the low interest rates that are being charged. At the moment interest rates are still falling and you as a consumer can benefit from that. In addition to low interest rates, it is therefore also advisable to carefully examine the conditions of the loans, which means that you will never be confronted with unpleasant surprises, as a result of which a cheap loan will become an expensive loan.
The price of the loan is not only important, the conditions also play a major role in the choice of a specific lender. So take out a loan that suits you at a low interest rate and favorable conditions. Only then are you satisfied with the loan that you take out.