Here are 10 tips or advice for you who are going to take out consumer loans online right now. Many often end up in a situation where one needs a large sum of money quickly, it can be an unforeseen expense or a material damage, for example, that is not covered by insurance.
Here are some tips for those who are considering taking out a consumer loan:
The effective interest rate is crucial
It is undoubtedly the effective interest rate that should decide which loan you should choose. This interest rate is what you actually have to pay for the loan. Many banks and finance companies market a low nominal interest rate, but this interest rate does not include the actual cost of a loan.
Forget the nominal interest rate when applying for consumer loans. The effective interest rate is the most important when comparing different consumer loans. As a rule, this is stated in interest per year. If you get the interest rate per month, you only have to multiply this by 12 to get the annual interest rate.
Be critical of the bank’s best interest rates
Even if a bank lures at a very low interest rate, in very few cases it is the real interest rate they can give you. Always look at the bank’s average or representative lending rate. On our pages we have stated this interest rate in the table and in the articles on each loan. Several banks have also set interest rates on consumer loans, but this places higher demands on you as a borrower, and usually only those with a solid economy are offered this. The lenders make an economic assessment of you and the effective interest rate is set based on this assessment. Because of this, it is recommended that you obtain offers from at least two different banks on consumer loans.
Repay as soon as you can
Pay back the loan as soon as you can, and pay extra if you can. The longer you spend on repaying the loan, the more expensive the loan becomes for you. Avoiding Interest Repayment – The repayment period often delays when you have a little bad advice, but this prolongs your down payment and the loan becomes more expensive. Avoid this and pay down as soon as you can.
Payment-free months should be the last resort – If you use one payment-free month, interest rates for this month will be added to the consumer loan. Then the repayment period and the total interest cost increase.
6. Use the credit card if you need to borrow a smaller amount – The credit cards with the lowest interest rate often have as good terms as a consumer loan. If you need a small sum fast, it can be just as easy to take these from a credit card. But keep in mind that multiple transfers between your own accounts, purchases and withdrawals can make it a very expensive affair. For example, if you need money to make a single purchase, either online or in the store’s payment terminal, a credit card can be a good option.
Contact your bank if problems arise
If you have payment problems, it is best to contact the bank as soon as possible. Then they are more likely to be accommodating. If you wait until the collection warnings come, it is not at all certain that the bank will cooperate.
Budget – It is recommended that you create a budget before taking out a mortgage loan. You can use SIFO’s standard budget to get an overview of your personal finances and how much you can repay on any loan. Ask for interest on other loans – By getting interest on your mortgage, for example, you can prioritize paying off the most expensive loans you have, such as the consumer loan.
Negotiation of interest rates – If you find the interest rate you are being offered is too high, there is room for negotiation with the bank. Do not expect them to lower it drastically, the bank usually gives a rate that makes sense in relation to your finances.