Where can I find the lowest interest rate on my loan?
After the crisis of a few years ago, interest on savings ended up in a free fall and there are even votes to lower it negatively. This of course also has consequences for the interest on all types of loans and then the payday loan in particular. Until recently it was difficult to find an interest rate below 10% for such loans, nowadays interest rates of 4 to 5 percent are the rule rather than the exception. For comparison: last year this was the interest for a long-term mortgage.
The general interest rate for banks is set by Demachin Bank and is a pure indicator of the extent to which a country is in a recession. The long-standing economist Keynes has argued that a low interest rate is necessary to induce consumers to spend more. In his opinion, a low interest rate on the savings account is a reason for the average resident to be a reason to make investments other than putting their surplus capital in the bank. The same low interest rate then extends to loans, making it not only easier for the average consumer but also more attractive to take out a loan for a large purchase.
At present, the economic situation in the Netherlands is clearly less rosy than before the fall of the banks, but a recession is just too big a word. Prices of basic necessities are still reasonably balanced, the housing market is picking up reasonably and the labor market is also becoming less and less bad. Reason enough for an intelligent borrower to now look for the financing options that suit you best.
Interest not saving
Unfortunately, looking for a good loan, just like everything else when it comes to finances, is not a one and two three thing for everyone. Simply bringing a number of different quotes and opting for the option with 4% interest instead of the 5% is not always an option.
Unlike all loans that are directly related to the purchase of a house, with a payday loan – whether it is a revolving credit or a fixed amount – the interest is (almost) never tax deductible. That makes the monthly charges in terms of interest net as high as gross and so it can be calculated. You must also look at the duration of your loan and the amount and method of repayment. With the increasing attention to get consumers borrowing and the increasing demand, more and more customized products are coming on the market to be able to offer everyone a suitable solution.
If you belong to that group of people who find it important that you not only do not pay too much for the services you purchase and would like to know exactly what fixed monthly expenses are, a payday loan (revolving loans are by definition always more expensive and may change during the term of percentage and repayment) with a linear course necessary. An interest rate is set for the entire term and the repayment starts low and continues to grow. This ensures certainty in terms of monthly charges because they remain the same throughout the entire term. There are changes only for the bank.
For example, for a loan of 10,000 euros for which 100 euros per month in interest and repayment is paid during the entire term, the ratio for the bank in the first year is 12 * 95 euros interest and 12 * 5 euros in repayment and the last year that is exactly other way around. This type of loan also has certainty for the bank, which means that the interest rate is often lower. The disadvantage is that with linear loans, the interest rate remains the same throughout the entire term. Especially with long maturities, this can mean that you pay more interest at a certain moment than is requested by other lenders at that time. Since interest rates are currently historically low, it is not likely that this will lead to a problem. The interest will not fall much lower than now, but it is something to take into account when taking out a loan.
On the guess
Are you more adventurous or do you find it important that you pay at all times what is reasonable (never too much, but not too little at other times), a revolving credit or a loan with a variable interest rate is more something that your street fits. The bank offers you an amount that you repay with a fixed amount per month. In addition, every month the interest rate applicable at that time on the outstanding amount is added.
This type of loan is not a source of certainty for you or for the bank, which means that the interest rate is often slightly higher than with a linear loan. Taking out this type of loan is therefore often a good choice in periods when the interest is high, because the chance that you will pay less in terms of interest during the term is certainly present. For relatively small amounts, it is often not worth the gamble and at the moment that you do not expect a fall in interest rates in the foreseeable future, it is also not the obvious choice. If the interest would only fall in a few years, you have now repaid so much that your monthly payments have already fallen.
In short: in a period that the interest rate is low, it is convenient to contact one of the many agencies that assist you in charting your wishes and possibilities before entering into any contract. This way you can avoid the pitfalls in the financial landscape.