Loans are a long-term burden on the account, so it is wise to take out a loan.
There have been loans since people started trading. But never in credit history have loans been as popular as they are today. While in the past mostly only “debts” were made, when there was no other option and a loan was also something lecherous, today is borrowed for all sorts of credit.
The consumer society makes it very easy for consumers to fulfill their wishes and, if the money is not there, to take out a loan. Accordingly, the danger of over-indebtedness increases. Especially among young people, there has been an increase in private bankruptcies in recent years.
This risk can be countered if, despite the multitude of opportunities that are offered and often imposed, loans are only taken with caution. So what should be considered and where to be careful. With our contribution we want to provide appropriate food for thought and hints.
Caution trap – take a loan, what to pay attention
A loan can help in a financial emergency, but it can also lead a borrower into economic ruin. Installment loans are among the most lucrative deals that banks make. Even during the economic and financial crisis, demand for installment loans has hardly declined. To entice customers, banks are tempting with such promises as “We will give you the interest”. For example, zero-percent financing is popular and consumers make purchasing decisions they did not want to make. Who he makes himself the rule to take a loan never spontaneously, because of any promises, which has good chances not to go into futile debt.
The dispatch hall
The repayment credit is used by many consumers more or less regularly. Many are not even aware that this is a loan that they claim here. The Dispo is in itself a good facility. It makes you financially flexible and increases your liquidity. But – and this is important, it should not be used regularly and only in exceptional cases. If it is used, make sure that the balance can be returned within three months. Those who handle their Dispo right, can take advantage of the advantages, without having to experience the disadvantages themselves. The interest charged on the Dispo are many banks beyond good and evil.
Always make a credit comparison
If the decision has been made to take out a loan, the bank should be chosen wisely and a loan application will be made. Many providers compete with each other and advertise with low interest rates. If you use a free loan comparison now, you can save a lot of money by getting a really cheap loan at the end. The basis for the comparison should always be the annual percentage rate.
Choose the right repayment term
Many consumers tend to choose the term of their loans in such a way that the monthly rate is as low as possible, even if they could afford a higher rate. We recommend to proceed with caution and to make the term of the installment loan as short as possible, because then faster debt-free again.
Are several loans useful
Those who take credit with caution, should make sure that not everything is purchased on credit. Of course, it is normal that in addition to car financing and mortgage lending even smaller loans are taken to make purchases. If it is high enough income and the rates can be easily redeemed, that is not a problem.
If the economic situation is rather modest, one or the other should be better avoided. Anyone who, as a consumer, realizes too late that their obligations can hardly be fulfilled should urgently look for financial reserves in their spending. A debt repayment loan can also solve the problem.
Loans, in principle, are a useful thing that can often make life easier and more beautiful. But the repayment of a loan should never become a burden or a financial strength act. Therefore, it is important to check the financial conditions before borrowing and to check in advance whether you can afford a loan.