You borrow money responsibly. These 9 tips will help you get the best loan. A loan is not always a bad choice and is often a lot cheaper than having an overdraft at the bank or using a credit card. It is relatively easy to borrow money correctly without encountering problems later. Only borrow money if you really have to, compare the interest rates and read the quote and conditions carefully!
1) Only borrow money if there is no other option
If you absolutely need money and it is possible, you can take out a loan. You pay interest on the borrowed amount. Depending on your own income, you can only pay the interest with a small repayment per month or more than that to pay off the loan faster. You can also borrow to invest the money and generate new money, which you then use to repay the loan.
2) Borrow through an intermediary
An intermediary, a provider of loans, for example, sits between you and a bank. You then take out a loan through the intermediary who receives commission for this. It is cheaper to try to take out a loan directly from a bank, where the money comes from. An intermediary also wants to make money from taking out your loan. This is reflected in the additional costs.
3) Compare interest rates
You can quickly compare the most current interest rates from different loan providers on the internet. Be careful not to confuse the interest rates of offers with the regular interest rates to avoid nasty surprises in the future. Also look at the conditions and term of different providers.
4) Certainty in the repayment of a loan
Always choose a fixed interest rate that is fixed for a longer period. A variable interest rate carries the risk of fluctuations in repayment. Sometimes the interest rate drops, but usually not. As a result, you don’t know exactly where you stand each month. A fixed interest rate therefore offers certainty in your expenses every month. It is better to take this into account when planning the household budget.
5) Borrow money from family or acquaintances
You can choose to borrow money from a family member or an acquaintance. If you do not approach this in a businesslike manner, you may run into problems if it later turns out that you cannot repay the repayments on time. Therefore, if you choose to do this, make sure that you approach it the right way.
6) The interest rate is negotiable
You can always try to get a discount on the interest rate on a loan. You can always ask questions. A lender is more likely to give a discount if fewer loans are taken out in a certain period. It is therefore possible to negotiate the interest rate on a loan with a bank.
7) Refinance a loan
Interest rates fluctuate over time. This may mean that if you have taken out a loan with a certain interest rate in the past, you can do so cheaper by transferring the loan. If the current interest rate is lower than the interest on the loan, this can be an advantage. Good calculations are important to ensure that it is actually cheaper. Take into account any fines you may have to pay when transferring.
8) Read the quotation and conditions carefully
You are entering into a financial commitment for a longer period of time. It is important that you read all the paperwork carefully and that you understand everything! If you are in doubt, ask the bank. The starting point must be that you understand all the conditions.
9) Borrow money with a BKR registration
If you have a BKR registration, you can no longer borrow money in a normal way. If you still want to take out a loan, you can do so with lenders who do not carry out checks at the BKR. What you can also do is provide more income every month. This is also a way to create extra financial space.