The personal loan is a popular consumer credit. With this type of loan you can finance virtually all kinds of goods.
From a new car to a complete renovation or renovation. And from a new, fresh interior design to your own energy supply in the form of a heat pump or solar panels. It is all possible with the personal loan. In the meantime, this form of loan has left its rigid, fixed character behind. For example, it is now possible for most lenders to have the loan accelerated and paid off without penalty.
When borrowing money it is important that you are aware of the loan rates but also of the conditions. We explain below how you can calculate the costs of the personal loan.
How much does the personal loan cost you in total?
The most important question you have to ask yourself before you apply for a personal loan is: “How much does a personal loan cost me in total?” It is easy to calculate the costs in advance for this consumer credit. Personal loans have a fixed character. For example, you agree a fixed loan amount with the lender (this does not change during the term) and the interest is fixed. Because the term is fixed, the amount of the repayment is the same every month. You can easily calculate your monthly costs on the bank or lender website using a calculation tool.
Can you bear these loads?
If you have calculated the costs, it is wise to set the monthly costs in addition to all your other fixed costs. How much money is left per month? If there is hardly any money left over the line, it is either not wise to borrow money or you will have to opt for a longer term. In the latter case you will pay longer on the reimbursement but the monthly costs will be lower. Note: In the case of loans with a longer term, the interest rates are usually lower. But because the loan has been repaid less quickly, you are ultimately more expensive with a long term instead of a short term.
Suitable for a concrete loan target of which the price is known
The personal loan is the best type of loan you can request if you have a clear purpose for it. It is important that the price of the object or service is known. You can then adjust the term of the loan accordingly. For example, if you were requesting a revolving credit for financing a car, chances are that you are more expensive with this credit. After all, the bank charges a variable interest rate, which means either your monthly expenses may rise or you take much longer to repay the loan.
Low interest does not say everything
The level of interest does not directly say anything about the total costs. When looking for a cheap personal loan, focus not only on the interest rates. The conditions are much more important. What happens if you can no longer pay the loan due to illness or, worse, by death? Is a term life insurance policy included in the loan? How does the bank or lender deal with payment arrears? Can you redeem the loan more quickly without penalty?