How do you borrow cheaply? 10 tips!

Everyone borrows money sometimes. How do you borrow money cheaply? There are several reasons why people take out a loan. But before you take out a loan, it is wise to get everything straight in order to minimize risk in the future. What will your financial situation look like in about ten years? For example, children cost a lot of money and do you still have that nice job you have now? Therefore, read these 10 tips and take out an affordable loan!

Revolving credit or loan?

If you occasionally need extra money, a revolving credit can offer a solution. A loan may then be too much of a remedy. However, with a revolving credit you must ensure that you do not take out too much credit and that you also repay it on time.

Don’t borrow too much money

When taking out a loan, you should pay close attention to what you can pay monthly. A responsible loan also leaves room in the monthly costs for other expenses on fun but also unforeseen things. There are different types of loans. Every financial situation is different, so check carefully which loan form best suits your own situation. Pay close attention to any mandatory insurance and additional costs.

Request at least two quotes

If you request multiple quotes, you can compare certain things. For example, you can compare the interest rates offered, but also the conditions. In the credit prospectus you will find all the important information about a quote. Be sure to read the small print to avoid nasty surprises later. A credit prospectus is normally included with the quotation. If this is not the case, you can ask the loan provider for it.

A low interest rate on a loan

When a loan is offered, a lower interest rate is often offered for a certain period of time. Therefore, check carefully what the interest rate will be after the promotional period, compared to the term. It also often happens that so-called starting interest rates are mentioned in advertisements. The effect of this type of interest is that the higher the loan amount, the lower the interest. This usually involves very high loan amounts and your loan falls into the category with a higher interest rate.

The term of a loan

Determine in advance the purpose for which you want to take out a loan. If you need money for a car, make sure that the loan does not last longer than the life of the car. Then you also get rid of the loan if you want to get rid of the car.

Being overdrawn is more expensive than borrowing

Converted, the daily interest you pay on overdrafts is effectively around 15%. This is quite a lot more than you pay on a loan or revolving credit. And yet the conditions of a loan or revolving credit are often more flexible than the benefits of overdraft.

Buying on installments should be avoided as much as possible

You quickly receive the product with an installment purchase, but the interest you actually pay is often quite high. Just calculate the interest on a product that you can purchase on installments. It is often a lot cheaper to take out a loan at a significantly lower interest rate.

You should not borrow for payment arrears

Never make up a shortfall from one loan with a new loan. This is how you go from rain to rain. You will have even more monthly charges to pay.

Transfer the loan

If you want to transfer a loan, look carefully at the term of the new loan. The new interest rate may seem advantageous, but if the term is longer this does not actually matter. You will then pay just as much interest or perhaps even more than before.

What do you pay attention to when taking out a loan?

  • mandatory insurance
  • duration of the loan
  • amount of interest
  • additional costs
  • period of the promotional interest
  • read and compare the conditions
  • pay attention to the fine print
  • choose the right loan type
  • there is a temporary promotional interest
  • take the time to read everything carefully
  • Please note that the additional monthly costs of a loan are bearable
  • match the term of the loan to the lifespan of the product
  • look at the future
  • pay attention to tax benefits, see the tax authorities