Borrowing money costs money, we all know that. But exactly how much it costs, that is not clear to most of us. When you take out a loan, you pay interest and repayment each month during the term of the loan. How much you have to pay per month differs per loan. In this article you can read where you can borrow the cheapest. We also give you 5 tips for responsible lending.
Cost of a personal loan
When you take out a personal loan, you borrow a one-off amount that you also get paid into your account in one go as soon as you take out the loan. You determine in advance how long you want to repay the loan. In other words: you set the term to take out the loan. What is also certain is the interest. The interest rate at which you take out the loan will continue to pay you for the entire duration. As you can see, a personal loan offers a lot of security and clarity.
Nowadays you can also pay off a personal loan faster without a penalty. It is often the case that your debt that is still outstanding when you die will be canceled. This way your surviving relatives do not have to repay your debt.
The interest you pay depends on the amount of the loan. The greater the amount you borrow, the lower the interest rate becomes. This is because a fixed amount of administration costs is charged for each loan taken out.
Cheapest personal loan
As you can see, the cheapest personal loan at the moment can be requested from Lookfam, part of Credit Group Nederland. Our investigation recently revealed that Credit Group Nederland is the bank where you can borrow at the lowest interest rates and where most applications are approved. Are you curious about what it will cost you at this bank? Request a free quote.
Costs of a revolving credit
A revolving credit is a flexible form of borrowing money. You agree a maximum loan amount with the lender in advance. You can then decide for yourself when you withdraw an amount from it. When you have repaid the loan in full, it is impossible to say in advance, because the term of a revolving credit is not fixed. You may withdraw money that you have repaid again if necessary. It is sensible to repay part of it every month. This way you will not be left with a revolving credit.
If you opt for a revolving credit, you are dealing with variable interest rates. Interest rates may rise and fall during the term of the loan. At more and more banks you will be informed of this by letter at least 14 days before the interest rate changes.
Cheapest revolving credit
Are you looking for the cheapest revolving credit? Then homeowners can apply to Lookfam, part of Credit Group Nederland. But a loan with the NatBank Netherland can also be concluded at a favorable price. If you are curious about what it will cost you, you can request a quote free of charge and without obligation. Feel free to request a quote from three banks so that you can then compare it with each other.
Online lenders generally know about 2% less interest than the big banks.
Borrow money from the bank
Many people choose to take out their loan at, for example, the bank where they took out their mortgage at the time. Well-known, trusted and easy. But what they don’t know is that the interest rates at these large banks are often higher than at online lenders. Online lenders do not incur additional costs for, for example, a large number of staff and an extensive and expensive office network, from which you then reap the benefits. Online lenders also manage to automate a large number of things. By saving on those costs, they can make you a sharper and cheaper offer.
Online lenders generally know about 2% less interest for a personal loan. If you look at such a difference over a loan amount of 25,000 euros, then that is more than 650 euros.
What does it stand in red
Temporarily standing red can be a handy solution and is not a bad thing. No less than 16% of the Dutch population is in red every month. Yet it remains a form of borrowing and therefore you will always have to pay interest on it. That interest rate is between 8 and 14 percent per year. As you can see, this interest rate is a lot higher than the interest you pay on a personal loan or revolving credit.
If it happens more often that you are in the red, consider taking out a revolving credit. That way you also have a buffer in case of an emergency. But then at a lower interest rate. In addition, with an alternative loan form you are required to repay an amount each month. That way you try to eliminate your debt again.
5 Tips for responsible lending
Borrowing can sometimes be a good solution. Just think of a house that needs to be renovated urgently to prevent more expensive repairs. Or how about your car well maintained, so that you avoid expensive garage visits. We give you 5 tips that you can use to borrow responsibly. That way you ensure that you borrow as cheaply as possible.
Tip 1: Request multiple quotes
You cannot take out a loan without comparing different loans with different lenders. To make a good comparison it is necessary to request a quote. You then specify your specific wishes, so that you are told exactly what that loan will cost you per month. Only an interest rate in the table does not say what it will cost you, since that depends on several factors. Always request at least two quotes to compare with each other.
Tip 2: Check for an AFM license
Credit providers are required to apply for a license from the AFM. If you have found an interesting lender, always check for a license or any warnings. When there is a warning for that lender, you should not do business with it. You run a big risk of being scammed. Don’t you see any information about the lender you are checking? First check whether you have written the name completely correctly. If that is the case and you do not see anything, it is possible that they make use of an exemption scheme. Then do not simply agree, but first ask for an explanation. You can also do this at the Financial Markets Hotline. Another reason for not getting information visible is that you are dealing with an illegal lender who has never applied for a license.
Tip 3: Compare the conditions
In addition to the interest rate that is requested, the conditions are extremely important. These can help determine whether it is an interesting loan for you or not. Therefore, read these carefully and compare them with the conditions set by another lender. Some conditions to take into account are:
Can you repay early or do you pay a fine?
Are you obliged to take out a life insurance policy?
Is the loan available in the term against which you want to take out?
Tip 4: Check the interest
It is important to request the interest rate that you will pay in your personal (financial) situation. Because this is different for everyone, you can again not only rely on the percentages in a table, but you will have to request a quote yourself. This way you know exactly what you will pay in interest. Then check for the following data:
Is the interest rate fixed or is it variable?
How long does the interest rate stated apply?
Which part of what you pay per month is interest?
Do you actually repay, or do you mainly pay interest each month?
Tip 5: Do not do anything under pressure
Nowadays many loans are applied for online. An advantage of this is that you can no longer feel pressured by, for example, the consultant who comes to visit you at home, or the fact that you are pulled out for a few hours when you are allowed to visit the office. These can be ways in which they try to convince you. Never fall for it, but always take your time. Only when you have looked at all the interesting loans at your leisure do you make an informed decision.