There are many credit offers. However, if you want to find the personal loan lender, you should pay attention to a few things. The best tips for taking out a cheap loan.
A new car, the renovation of one’s own home or the purchase of a new sofa – for years banks have been advertising installment loans with lowest or even zero interest rates to fulfil these and similar wishes. Don’t let this dazzle you! And don’t think that it can’t be cheaper after all. That can become expensive.
How to take up surely a favorable credit:
Anyone wishing to apply for a loan should first check their own creditworthiness. If you google for “creditworthiness check”, for example, you will find suitable providers on the Internet. Some of them, such as Score Kompass, offer the creditworthiness check free of charge and as often as you like per year. Alternatively once a year self information can be obtained free of charge directly from credit agencies such as Schufa.
This information will show you how good your credit rating is and what it may negatively affect. If any of these data are incorrect or outdated, they should be corrected before applying for credit, thus improving your creditworthiness. Otherwise you risk paying unnecessarily high interest. In the worst case, your credit application will be rejected due to your creditworthiness.
Realistically determine credit amount, monthly installment and term
Calculate the required loan amount as accurately as possible and think not only about here and now, but also about tomorrow and the day after tomorrow. This is important because it is always advantageous for you to have only one loan. Even a second loan can be significantly more expensive than the first, which would noticeably increase your total costs.
You also have to be realistic about the monthly repayment rate and above all be honest with yourself. Think not only of here and now, but also of the time, for example in one, two or five years. Are you still able to pay today’s installment? In total, after deducting all running costs from the remaining money, a maximum of 40 percent per month should be used for the loan repayment. Accordingly, the correct term can be chosen.
Choose the right type of credit
If you plan to buy a car, renovate your condominium or house, or buy new furniture, you should use a car loan or residential loan. These special loans are often cheaper than classic installment loans, which can be used for any purpose. There are also special loans for civil servants. They have no specific purpose and are usually characterised by longer maturities, higher loan amounts and higher permitted debt.
Take out a loan together with another person
In most cases, it is advisable to take out a loan together with another person: From the bank’s point of view, this makes you more creditworthy and therefore more likely to receive a loan commitment and generally pay lower interest. In particular, married couples should always take out a loan together, as they are liable for their spouse’s credit anyway. As a married couple, you can only benefit from taking out a loan together.
As a second borrower are suitable beside the life and marriage partner as well as the parents above all such persons, which can show a positive Schufa information and to which a close trust relationship exists. Both borrowers should know: The second person is also obliged to provide a detailed self-disclosure. As a result, they must also disclose personal data such as contact details and place of residence, information on the employment relationship as well as relevant expenses and income. In addition, a Schufa report on the second person is also obtained. If the loan is no longer repaid as agreed, the bank has the right to seize the salaries of both debtors in order to pay the balance of the loan.
Obtain and compare credit offers
The more offers are collected and compared by branch and online banks, the better. However, you should only obtain condition requests at first. This is nothing more than a request to a bank for its current financing conditions. This inquiry has no influence on your Schufa creditworthiness. Make sure that you provide the same information on the loan amount and purpose as well as on the borrowers in all enquiries. Only then can the offers be compared with each other. As a rule, you must provide the following information:
Annual percentage rate of charge / effective interest rate: Banks are required to indicate the annual percentage rate of charge when making an offer of credit. The APR expresses the annual cost of a loan and is expressed as a percentage of the loan or disbursement amount.