For many people an installment loan is the solution to buy a car or to acquire a house. Large amounts of money are involved and this can often not be solved with the savings account. In the event that there is some savings, people would rather keep it for emergencies. For example, you can easily buy a car through an installment loan. Then you pay a small monthly amount and you can already use the car. Handy for many people, but what should you look out for when looking for a loan?
Not so expensive installment loan
The costs are of course important for a loan. They sometimes make the payment a lot more expensive. How can you easily avoid that? By comparing as many banks as possible and looking closely at the costs they charge. You pay the costs on a loan together with the monthly installments. Together with the capital that you have to repay, you have one amount that is withdrawn from the account every month. keep that amount as low as possible by simulating loans. And that is now also possible via the internet. So you don’t have to go to a bank for it. This saves you a lot of time and the result is the same.
Enter an amount that you wish to borrow and choose the number of months or years for the payment. With this data you already have a result in front of you. You can also see the costs separately, take a good look at the APR or annual costs percentage. Banks are also required to provide this information with a simulation. So you are immediately aware of the costs and you know where you stand if you apply for the loan. If you now also perform this operation at other banks, you will quickly see where the best conditions can be found. And that is always the offer with the lowest costs, so you have to pay less.
Amount to pay from your income
There are lots of costs to pay for everyone every month. Maintaining a good budget is therefore necessary so that you do not spend too much money. Banks also pay close attention to this by letting customers spend only 1 / 3rd of their income on loans. This way, they do not get into trouble and banks have the certainty that the installment will continue to run smoothly. You can count all your income together and deduct fixed expenses such as loans and alimony. You can then spend what remains on loans. Banks will always make this calculation before granting you a loan. If you get the green light then the money will be in your account or go directly to the seller. For example, for a car, the money usually goes directly to the car trade. You can then immediately start using the car.