When your dream of a new car or your own apartment verifies your account balance, you start thinking about a loan. Are you looking for ways to keep the cost of commitment as low as possible?
When looking for a loan, it’s worth taking a good look at what banks are proposing. By approaching your future financial commitment sensibly and analyzing various offers, you can save from several to several dozen thousand dollars! So let’s approach the matter respectfully.
Borrow as much as you need.
Since you started thinking about credit, it means you need money for a specific purpose. Therefore, at the very beginning determine what amount you need. Remember that you must surrender each dollar borrowed with a surplus. It is not worth borrowing more to have other pleasures.
Learn several ways to reduce the cost of an existing loan.
Pay off as soon as possible.
The period for which you incur a liability has a very large impact on its total cost. There is usually one rule – the longer the repayment period, the lower the monthly installment, but the higher its cost, because interest is added to each installment! Therefore, make a good estimate of your options and consider for what period to take a loan.
If you have free cash, overpay the loan or pay it back in full.
Insurance for credit is an additional product on which a financial institution can earn, which means that the customer has more expensive credit. Of course, there are many insurance options, eg for life or unemployment, and they can be useful, but usually on the free market we will find an offer with a much lower premium than the bank will offer us.
If the bank has taken out the insurance premium for the entire loan period in advance and it is usually several thousand dollars, cancel this insurance and the funds will be returned to your account or transferred to the loan, which will reduce the repayment amount.
Transfer to another bank
Following the example of stores, banks are also introducing promotional offers, eg lower interest rate or no commission and insurance for the loan.
If you have a loan with a maximum interest rate (currently 10%) and another bank suggest transferring the loan to yourself with a 7% interest rate and additionally does not charge a commission for launching, there is nothing to think about but take advantage of the offer.
Example: Transferring a loan of USD 50,000 with an interest rate of 10% to another bank with an interest rate of 7% with a loan term of six years, the installment will decrease by about USD 75 a month. So for six years you will save about 5400 USD
More and more law firms are beginning to specialize in recovering commissions for clients who have repaid loans early. So if you repaid the loan in full earlier than the repayment schedule provided for, it is worth trying to recover the commission for the earlier repayment period.
As you can see there are many ways to reduce your loan costs. Theoretically, the larger the loan amount, the more you can get back. So you have to be interested in the topic and act.