You don’t just borrow money, but do you have to borrow money for everything you want? Of course you have to take out a loan before buying a house or buying a car, because most people do not have this amount in their bank account. Nowadays a lot is borrowed for luxury items that are not really essential, is this wise? With the ten tips for borrowing money you can see what you should pay attention to.
Purchase by installment
You can also buy a new installment television, but you can also buy a holiday or a new couch on ‘the bar’. Many people do not realize that this way of borrowing is very expensive. Where you usually pay around 7% interest at the bank or other lending institution, you will soon pay around 25% interest on goods you buy on installment, it is easy, but a very expensive way of borrowing, see the ten tips for borrowing money for explanation.
Pay with credit card
Every credit card also has a high interest rate, which will only start to accrue interest if you opt for the spread payment option, which is also the only way that credit card companies can earn money. If at the end of the month you simply pay everything you have spent in that month, you will not pay any interest at all. With the ten tips for borrowing money you can see how you can prevent this.
Nowadays you also see many so-called credit cards where you can only use the amount that you set up there yourself. These are not actually credit cards, but prepaid or debit cards. So safe because you can use what you have put on the map yourself. The disadvantage of such a prepaid card is that when renting a car or booking a hotel room an amount is often reserved until the end of the agreement. With credit cards you do not notice this, but with debit cards you have lost this reserved amount and you have to keep a close eye on the fact that the amount is also refunded.
Ten tips for borrowing money
With the ten tips for borrowing money you can see what you should pay attention to when taking out a loan. Compare the providers and not only choose the cheapest, but also pay attention to the best conditions.
1. Compare the interest to be paid, even a half percent interest can already be a nice amount.
2. Buying with installments, standing in red at the bank, and paying in installments with a credit card means that you are always the most expensive, this can sometimes save tens of percent.
3. Be careful with an offer with a low interest rate, it may be that this low interest rate is for a short period only and that you will then pay a much higher interest rate.
4. Check carefully whether a provider has a license from the AFM, you can check this on the website of the AFM.
5. Compare different providers, note that not all providers are reliable.
6. Is the amount higher than what you have requested? Then you have to be on your guard because the institution has also talked to you about insurance.
7. Pay attention to the interest rate, is it fixed for the entire period, or variable, with a variable interest rate you may have to pay more during the term.
8. Also look at the fines that must be paid if you pay too late, how high are these fines and when exactly are they charged.
9. Can you pay off earlier than agreed, or do you have to pay a fine, certainly something to keep an eye on.
10. Previously mentioned. Pay attention to which insurance policies you need to take out to get the loan, this increases the amount to be repaid considerably. It is also called tying and it seems that you MUST take certain insurance policies to get the loan.