What are the criteria to consider when choosing a loan?
August 26, 2019
Borrowing rates have never been as low as they are today.
This is even true for non-mortgage loans such as personal loans. Compared to recent years, there is a nearly 20% decrease in THM in this area. In the case of mortgage loans, this decline is even greater, roughly one third of the APR for non-mortgage loans. This is possible because there is no real estate collateral behind a personal loan, so it will always be more expensive than a mortgage. Thanks to low credit rates, many people started buying a home, despite the fact that property prices have risen. People also borrowed personal loans more easily when they needed quick financial help.
However, low credit rates can be disadvantageous if one is not careful enough.
It can easily get you in trouble, so you can jump into a loan recklessly. To prevent this from happening to you, we’ve put together some practices to consider before borrowing.
- Liability: Taking out a loan is everyone’s responsibility. Think well, for example, for a home loan, you can commit for up to 10-20 years.
- Budget: Before you borrow any money, you might want to look at your family cashier. How much is the monthly expenditure (overheads, other expenses), or what kind of loans you already have that have to be repaid monthly.
- Ads: Don’t just watch the ads and make decisions based on them. In addition, there are a number of options that you may be better off doing for you. It is more tiring, but it is worth getting information
- Credit Purpose: It is important to choose the right loan for your credit purpose. It is definitely worth seeking the help of an expert who knows exactly what is the best loan for your needs, that it is best suited for you and that you do not waste any money on the window.
- Banks: Don’t just look at the offers of the bank whose account you are keeping, you might find a much better deal than another bank.
- Internet: To avoid having to go through all the banks in person, you can find great information on the Internet. Calculate on our site!
- Installment installment: Choose the installment installment that fits into your monthly budget effortlessly, even in the event of an unexpected major expense. Generally speaking, the monthly installment of the loan should not exceed 10-15% of your monthly income.
- Maturity: Choosing the optimal maturity is not easy. If the term is too short, it can be financially burdensome. If you feel that you can pay a lower installment more safely, you may want to opt for a longer maturity due to future inconveniences. Prepayment is usually also possible.
- Interest rates: The big question is whether a fixed or floating rate loan is better worth it. It’s up to everyone to decide for themselves. By definition, the interest rate on a variable rate loan varies. Here, you need to consider whether your budget can accommodate your salary, even in the event of an increase. If you prefer to keep your expenses accurate, predictable, then you should opt for a fixed rate loan.
- Costs: Consider not only the installment payment, but also other costs around the credit. There may be one-off charges when borrowing, which makes borrowing more expensive.
- Documents: It’s a good idea to know in advance what documents are needed to get the loan you want, so that you can obtain it in full by the time the loan is taken. For example, in the case of a quick assistance personal loan, do not waste time.
- Reserve: It is a good idea to make some reserves before you take out a loan, because at any time you may have an unexpected life situation, when it becomes difficult to pay off your loan or you have no budget at all. In such cases, some saved money may come in handy.