The essentials in brief
- A loan must not exceed your financial resources
- Check in advance if you can even take out a loan
- Currently, lending rates are lower than ever
- The total package of a loan should suit your location
- You can benefit from credit options when paying off
- Credit comparisons save time, are up-to-date and often independent
- Take enough time to compare bids
- Here it goes directly to the credit comparison
- the essentials in brief
- What you should consider before borrowing
- How to find the right loan
- How to record your loan
- FAQ – Frequently Asked Questions
The best loan is the one you do not need. Such a financial transaction always entails risks and usually represents a long-term liability. However, in some cases it is not possible to avoid lending money from the bank. Due to the currently very favorable interest rates, loans are cheap. Nevertheless, it is important to pay attention to some aspects, so that your credit pays off the bottom line and does not become a debt trap. The focus is on the modalities for a safe repayment and avoidable additional costs. We’ll explain step by step to you in this article, what matters when it comes to taking credit.
What you should consider before borrowing
Before you decide on a loan, you should first consider whether you really need it. Sometimes credit can be avoided when it comes to not overly expensive purchases. The advantage is always the avoidance of debt and the protection of your (good) credit rating. So do not rush to borrow money for a purchase that you might otherwise be able to finance. Above all, you should be realistic about your situation. On the one hand this serves as your own hedge, on the other hand your lender will examine your financial situation.
Ask the loan
First, you should ask yourself if you need a loan at all. You can hardly afford to get a loan to finance a construction project or buy a property. But if it is about the acquisition of other things, it is worth balancing. From new cars to smartphones, you should look for alternatives to credit. For example, would a 20% cheaper year-old car not be as suitable as a new car? If it does not have to be the most up-to-date iPhone, brands from just € 100 can be found at the online retailer or at the discount store.
By looking at other options, choosing models from the previous year, or taking the time to save on a consumer good, you can bypass a loan. You may also be able to use up reserves that are in a savings account. At least, such reserves can reduce the amount of credit needed. This pays off in most cases on the interest costs.
Consider your financial circumstances
For the realization of a loan, it must always be clear what rate of installment you can afford. Find out how much of your free disposable income remains at the end of the month. What secure income do you have and what is regularly deducted from it to the landlord, insurance or other living expenses? The plus you can spend on the repayment of a loan.
Do not calculate too short, because you can always have unpredictable expenses in the house. In addition to the cost of repairs or repairs, you should still be able to save a small cushion despite credit burdens. After all, you will need money for gifts here or there, or you might want to treat yourself to a little vacation. Here it goes to a credit-rate calculator.
Loan amount and maturity
Include in your considerations how long you want to spend time for the repayment. A quick payback brings less interest costs. But you have to raise higher monthly rates. On the contrary, your financial burden per month will be lower if you choose a longer term. This gives you greater latitude for your other financial transactions.
The amount of credit needed should be as high as necessary, but as small as possible. Compare therefore exactly the price for what you want to buy and start there. For example, if you can lower the purchase price of a car or kitchen by $ 2,000, you would need to take a smaller loan and save on interest.
Every lender will inquire about your current financial condition and credit rating. This depends on the credit line, but also the interest rate. Both can be influenced by security benefits in your favor. If you own real estate, savings or other assets, you can use them as collateral. By accepting these, your bank will protect you against your potential default risk.
Alternatively, you can increase your credit rating or loan amount by using a second borrower. Similar to a guarantee, you include a second person in your contract to secure your loan. Prerequisites are always the age of majority and a sufficient creditworthiness of your partner.
Before taking up the loan, you should think through all aspects again. For example, is the installment rate consistent with your budgetary management, are the funds readily available to you, do not your family plans collide with the credit burden? The more precise you can see about the consequences of borrowing and planning the repayment, the safer your plan will be.
A loan ultimately serves to fulfill your dream or make a necessary purchase. If you take on the repayment financially, it can bring unpleasant consequences. The better you plan in advance, the safer you are to avoid unpleasant surprises and prevent a financial distress.
The role of the credit bureau
credit bureau is a credit bureau that rates your creditworthiness. There, all loans, contracts or personal data are collected and evaluated by consumers. The calculated credit bureau score plays a crucial role in lending. A commitment and even the interest rate depends on the individual credit rating. This worsens by any installment, financing or other business on pump. Your account also has an overdraft on your account or if you delay payments. By being exemplary in financial matters and by avoiding lending whenever possible, you can save and improve your credit bureau score. Once a year, you can have your credit bureau extract sent to you free of charge. Take the opportunity and check the entries on your person for their correctness.
Tempting loans with risks
If it comes to a classic installment loan, offers a number of models. Not every one is really worthwhile, even if it looks like it at first. Here we present a series of loans that offer advantages as well as disadvantages. By assessing them for themselves, you will end up making your decision easier. Before you consider any of the following loans, you should at least look at the offers of a credit comparison.
Especially if you are looking for smaller loans on the Internet, you might come across so-called mini-loans. Here you can borrow small money over a short period of time. As a rule, there is a credit line between 50 and 1,500 euros, which you can repay within 1 or 2 months. The interest rate seems moderate at first glance, but such microcredit can quickly go into the money. You have to expect considerable extra costs if you need the money in the short term. It also becomes expensive again if you want a flexible rate or can not repay on time. The bottom line is that these loans do not really pay off and should therefore be avoided wherever possible.
Less interest loans
Lending with low interest rates is the latest offering that has spawned the current low interest rate phase. As a borrower, you must have a particularly good credit rating. You will receive a loan of € 1,000 and have to repay a little less. This savings is not worth it, as this mainly affects your creditworthiness. Negative-interest credit offers are primarily for marketing purposes and are intended to appeal to new customers.
The loan without credit bureau is also called “Bank Credit” because it can only be obtained through foreign banks. You also get your money with a less good credit bureau score, as this rating is completely ignored. However, such a loan can incur higher costs and a stricter credit check. If you can and want to accept this, nothing speaks against such a “Bank loan”. Basically, your credit bureau score will not be burdened by such a loan.
What speaks for the online loan
With an online loan, you get a more comprehensive and neutral overview, as compared to relatively branch banks for individual offers abklappern. With just a few clicks and entries you will find the best and cheapest offers available on the market. All conditions are easy and convenient to compare, which saves you a lot of time. As a provider, you will find a number of online banks that can provide you with low-cost offers. The favorable conditions result from the savings of such credit providers. These do not have branches and far fewer employees than long-established banks, but are just as reputable. A guarantee for this is provided by the fact that direct banks are of course also subject to the strict requirements of the German financial supervisory authority.
How to find the right loan
By having a clear idea of what kind and amount you need, you have done the preliminary work. When looking for the loan provider that suits you best, our online loan comparison helps. There you will find the currently cheapest offers as well as the conditions of the respective loan. In addition to the interest rate, also note the options offered. With various extras to a loan itself you can secure further advantages. These concern, for example, the nature of the repayment or the permanent securing of the favorable interest rates.