A large proportion of consumers sooner or later come into the situation that they have to take out a loan because their own financial resources are insufficient to finance the new car or the new furniture. But even with smaller purchases, an installment loan can be useful if the savings are not to be used, because they are intended for something else or fixed. Then all that matters is finding cheap loans where the cost of borrowing is low. http://sonic-revolution.net has more details
Apply for cheap loans online
Today, if you want to take out cheap loans, you do not necessarily have to go to your bank first and apply for a loan there. Almost all banks offer cheap credit over the Internet, so that a strong competition for the favor of customers has flared up. Interest rates on loans have been at a very low level for some time now, meaning that cheap loans can actually be the perfect solution to financial bottlenecks. But before the first credit offer is used, anyone who wants to take out a loan, should make a free loan comparison on the Internet. Each bank determines for itself at what interest rate it offers its loans. Although all banks advertise that they give cheap loans, but it is always better if it is checked in advance that it is actually cheap loans that are offered.
This is best suited to a free credit comparison, because the credit comparison of the layman at a glance an overview of the loan offers and can thus make sure which are really cheap loans, and which loan offers are too expensive. The benchmark for this is always the annual percentage rate of charge, which is given as a percentage, which makes loans comparable.
What to consider in a credit comparison
If one knows certain basic rules, a credit comparison is also understandable for the layman and easy to evaluate. Of course, only comparable credit offers may be considered. This means that it should be noted whether the interest rates applied for low-interest loans are credit-based or non-credit-standing interest rates.
The only extra can be compared. Seemingly cheap loans with credit-based interest rates have the disadvantage that you have to make a personal offer, if you want to find out how high the annual percentage rate will actually be. Only if one has several personal offers, one can decide, which cheap loans are and with which offers the interest rates are simply too high. In order to be more or less orientated, one should also look in advance at the representative examples that have been published by the banks since the introduction of the new Consumer Credit Directive in 2010. These examples give the APR, which is granted to two-thirds of all consumers. Really cheap loans with credit-based interest rates are only available to borrowers who have a 1A credit rating.
Find cheap loans easier
If this is too much effort, you should from the outset only interested in cheap loans, which are advertised with a fixed interest rate. These offers are then a fixed annual percentage rate that applies equally to all borrowers. Deviations may only exist depending on the loan amount and the individual duration.
The credit rating must be given
So far, the procedure has been described how best to find cheap credit offers. But it is also important to know that not everyone who wants to take out a loan gets a loan. Each bank checks from each credit applicant who makes a request, the creditworthiness. For this purpose, on the one hand, the credit bureau information is obtained and, on the other, the economic capacity is calculated. Only someone who has a faultless credit bureau and is financially able to repay the installments from the loan gets credit. This assumes that a regular income from a permanent position can be proven. The higher the income, the better the credit rating. At low incomes, it can be helpful for the credit decision if the loan application is made together with a guarantor.
The residual debt insurance makes the loan more expensive
Many banks offer their customers optional residual debt insurance and attach great importance to the fact that the customers conclude these for their own and for their own safety. As a borrower, however, it should be remembered that residual debt insurance is a cost driver that can turn cheap loans into really expensive products. For a normal consumer loan, however, the conclusion of a residual debt insurance is not necessarily required.
Especially not if you already have a current term life insurance, a disability insurance and / or accident insurance. In any case, the banks may only make the conclusion of a residual debt insurance a condition if they show the costs in the annual percentage rate. If you are looking for the lowest possible credit costs and have your own insurance, you should look for other offers, if the bank of choice insists on the conclusion of a residual debt insurance.