Here are some tips and advice for those who want to borrow money in banking or online.
The first thing to consider on the offer you receive is the interest rate on the loan.
Various banks and financial institutions often offer consumer loans and they, for their part, make big money on the interest rate that we pay to borrow money. In other words, this is the very first thing to consider when comparing loans and offers.
Declare interest rates as nominal interest rates
Remember that with many banks and lenders, they declare interest rates as nominal interest rates. This should be clear that the nominal interest rate should basically only be overlooked. Why you might ask? This is because they do not include all the real costs on your loan. What you should look into instead is what is called the effective interest rate. It also shows the actual cost of the loan and takes all fees into consideration.
Get the annual interest rate
Remember that you need to be careful to see if the loan is stated annually or monthly when you compare. It is quickly done to mix these together and then the completely wrong basis for the comparison. If the interest rate is stated as monthly, you simply multiply this by 12 to get the annual interest rate.
Please note that the interest rate you see advertised at a bank is not always the interest rate you get in the end. Your financial situation is also included in the calculation of the interest rate we are offered.
Plan your loan well
There are a number of consumer loans and loans to choose from and their interest rates range from 9% to over 30%. In other words, you can save a lot of money if you take the time to compare loans and offers!
Taking out a loan or consumer loan also means that you have to plan other aspects of your finances. How much can we handle per month? Think about your monthly budget and how long you think you need to repay the loan.
Finally, you should read more articles on this page to expand your knowledge bank. Links to several articles can be found below.