Transferring an existing loan or converting it to a new loan is a cheaper way of borrowing money and means immediate money savings. Compare, transfer a loan or merge loans. That is cheaper than having all kinds of small expensive loans, large and small, with too high an interest rate. Pay off old loans and take out a new cheaper loan. Transferring to a revolving credit is probably the cheapest option if the variable interest rate is low.
Transfer from your own bank or another bank?
- Transferring a loan, what is that?
- Merge various separate loans and credits
- How expensive is borrowing money?
- Advantages of transferring a loan from a bank
- Pay off loan with loan
- Transfer to a revolving credit with a variable interest rate
- Big or small sofa
- Is revolving credit cheaper?
Transferring a loan, what is that?
Refinancing a loan means renewing the loan with the bank or lender at a new interest rate. This can also be done by merging all kinds of existing loans into a new loan. This is very sensible, especially if there is a patchwork of smaller loans, where no one really has an overview anymore. If you have a credit card, are sometimes overdrawn, have taken out a mortgage or buy something from a mail order company, you already have many types of loans. All with their own agreements and probably with different banks. That is of course possible, but it is not convenient and usually more expensive than necessary.
Merge various separate loans and credits
Anyone who has several small loans and repayment arrangements can combine everything into a new loan. Many types of credit are eligible for consolidation:
- A personal loan;
- A revolving credit;
- Standing in the red;
- Credit card;
- Buying on installments, such as mail order credits or loyalty cards;
- Borrow with collateral. Think of home or jewelry, for example;
- Loans from family and friends.
How expensive is borrowing money?
In general, a loan is more expensive if there is no collateral, there is an increased risk, you have a debt with a credit card company, you buy on installment or you are simply overdrawn at the bank. Of course, all these bills are paid by you, and you probably don’t even notice. Sometimes the bills become too high every month and you are looking for a solution. In both cases it is worth considering whether it makes sense to transfer the various loans. Because paying 15 percent or more for an overdraft, why would you do that? By comparison: the interest on a revolving credit is less than half and with a mortgage you should consider much lower interest rates, because the house serves as collateral and therefore gives the bank more security.
Advantages of transferring a loan from a bank
Refinancing a loan means refinancing a loan or loans. You can stay with your own bank or switch to another bank. See how much you pay for what and for how long. In general, refinancing has the following advantages:
- A lower interest rate and therefore lower monthly costs.
- Lower costs and lower interest, because you combine several existing loans into one new loan.
- A large loan usually has a lower interest rate than a small loan.
- This way you can pay off other loans, even those with a bad history.
- You become more flexible.
- If you were already dissatisfied with your current lender, this is a good time to switch to another one.
- Your loans become clearer.
- A new loan also means the chance of better conditions with a bank or intermediary that you like.
Pay off loan with loan
Paying off a loan with a loan may sound a bit strange, but if the interest on the new loan is much lower than on the old loan, you can use the extra money to pay off an old loan or part of it. Moreover, you can get more credit with a lower interest rate than with a high interest rate. Ask a lender for advice so that he can view all the loans and make a proposal for a new loan on the condition that you also pay off part of the existing debts. A revolving credit is usually an excellent solution.
Transfer to a revolving credit with a variable interest rate
Revolving credit is the most flexible way of borrowing. You agree with the bank or intermediary the maximum amount of credit you can take out given your income and expenses. As long as you remain below this limit, you can withdraw money again and you only pay interest on the amount you withdraw. With the money you withdraw you pay off the fragmented loans so that you are freed from the interest.
Big or small sofa
Anyone who looks at the lending rates will immediately see that the lending rates are higher for smaller amounts and at the large banks. Most banks and lenders find these small loans less interesting because the administrative costs are relatively high for them. The interest you pay depends on the amount of money you borrow. The big banks sometimes prove to be relatively expensive.
Is revolving credit cheaper?
The loan interest on a revolving credit varies greatly per loan provider. It is therefore a good idea to request sufficient quotes. You don’t have to stick to your own bank. In addition, you will find a calculation tool on the website of the companies and banks that want to lend you money to view the various options for borrowing money yourself. You can of course also transfer to a personal loan with a fixed term and a fixed interest rate. Take a good look around the internet.
- Personal loan or revolving credit