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Installment Loans

What do you have to look out for in installment loans?

The idea of ​​going to the bank and getting a sum with the help of the installment loan is tempting. Finally fluent again, finally being able to buy the dream car or go on a long vacation. This temptation can also be deceptive. Because many of the euphoria forget that from now on monthly burdens will come to you. This means that the top priority should be to work out whether you can afford an installment loan at all. However, the bank naturally also checks the creditworthiness. The income is compared to the expenses you have. If the amount is too small to live, the bank will not match the loan, possibly reduce the loan amount or require collateral

 

Important aspects for borrowers

loans

Interest is another important aspect for the borrower. You can’t influence that, but you can find a bank that has lower interest rates. But how do you do that? Running from bank to bank and asking is hardly very productive. Right, and nobody has to do that. Fortunately there is the internet. Here you will find many credit comparison calculators that compare the conditions of the different providers. So you can quickly find a bank that offers the lowest interest rate. You shouldn’t think that between 5.99 and 6.49 percent, for example, is not a big difference. With a sum of 100,000 dollars, a 0.5 percent higher interest rate would amount to a sum of 500 dollars per year.

 

Application and requirement

If you want to take out an installment loan, you can go directly to the bank or apply for your loan online. In addition to the creditworthiness, which is a prerequisite for the approval of the loan, an inquiry is also made to credit record, the protection association for general loan protection. This means that if you have a negative entry there, the loan will not be approved. You get a negative entry if, for example, you have not paid invoices and a procedure is pending. All loans that are already running are also listed there. If you already know that you have a negative credit record entry, you don’t even have to make your way to a German bank. The famous credit record-free loan, which is offered again and again, is possible, but only through foreign banks.

 

Depending on your financial situation and your monthly income

money loans

The bank can ask for collateral. For example, many banks are demanding wage and salary assignment. This means that if you fail to make your payments, the bank can withhold your wages. In exceptional cases, a guarantee can also be requested. An outside third party acts as a guarantor and is used for payment in the event of non-payment of the monthly contributions. Some banks also require life insurance in the event of the borrower’s death. This would secure the loan amount. If the installment loan is a car loan and if it is taken out through the car dealership, it is not uncommon for it to be assigned as security. The vehicle serves as a deposit.

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Installment Loans

Installment loan rescheduling – so easy you can save!

 Did you rightly set some good resolutions for the new year? Are you sure your plans include spending less money unnecessarily next year and saving more if possible? Start with your finances today – the savings potential hidden in your old loan, for example, is unknown to many consumers and therefore gives the bank a lot of money every month.

Debt credit and save cash

Debt credit and save cash

In some cases, there is great savings potential in old, expensive loan contracts, which unfortunately many consumers often overlook: Almost all loans that were taken out more than two to three years ago are too expensive from today’s perspective! Thanks to the continuing low interest rate policy of the Cream Bank, interest rates for consumer loans in Germany have fallen steadily in recent years and are at an all-time low. A rescheduling of the old loan on a new loan at current conditions can therefore save a lot of money.

The savings potential offered by rescheduling an old liability for a new, cheaper loan at current conditions corresponds to the difference between the two interest payments that would be due in the future for both loans: For this, the consumer must first calculate which interest payments are due for the outstanding The loan amount of the old loan would have to be paid until the loan was repaid in full – this calculation compares the interest payments for a cheaper, new loan.

Pay attention to free special repayments before rescheduling

Pay attention to free special repayments before rescheduling

However, any fees incurred for the early rescheduling of the old loan should be deducted from the difference ascertained: some banks charge an additional fee for the early redemption and the resulting interest damage, the so-called early repayment penalty. If the bank does not allow free special repayment and therefore no free debt rescheduling of the remaining loan, the amount of the prepayment penalty must be deducted from the savings.

By the way: If you do not completely replace your liability and want to reschedule a new loan, use at least the excess Christmas bonus or a possible additional salary to make a special repayment. In this way, the outstanding loan amount is reduced and the interest payments as well as the total loan amount are reduced.