If you are planning to take out a loan, you will have to list a few things in advance. Where should you pay attention when taking out a loan? When should you not take out a loan? And what should you look out for if you want to take out a cheap loan? Are you taking out a personal loan or a revolving credit? All questions which are important if you want to borrow money responsibly at a low interest rate and with the right conditions.
1) Make a financial overview
Before you take out a loan it is advisable to put your income and expenses on paper. This way you have an overview of your financial situation and you can immediately answer the question how much can I borrow. Once you know what you have left over each month, you can calculate how much you can borrow without getting into trouble every month due to a red balance at your bank.
2) If you have savings, do not borrow
Many people have saved money and nevertheless take out a loan. The reason they give up for this is that they always have money in hand. In itself not such a strange thought only you have to realize that the interest you pay on a loan is much higher than the interest you receive on your savings. So if you have savings, it is not wise to take out a loan.
3) Purchase by installment, prefer not to do it!
We see them every day the advertisements on TV, buy this car now and pay in 2 years. It all seems very attractive but the costs for such a loan are so high that it is not wise to buy a car, TV or whatever in this way.
4) Make sure you are not in the red
It happens many people often, overdraft on the checking account. What many people do not know is that the interest you pay on this overdraft is high. A waste of money, try to prevent it.
5) Do not borrow more than you need
Sensible borrowing starts by borrowing no more than you actually need. It is all attractive to borrow more money and then just book that holiday or just go shopping for that extra amount, but you pay interest on every borrowed euro!
6) Do not let the loan run longer than the lifetime
If you buy a product and take out a loan for it, make sure that the term of the loan does not exceed the lifetime of the purchased product. It is very annoying if you are still paying to pay off your personal loan for the car that you have not been driving in for a long time.
7) Only take out a loan that you fully support
Also read the small print and do not take out a loan that you have all your doubts about in advance.
8) Compare the lenders and the loans
When taking out a loan, you will undoubtedly look online for a lender where you can take out a personal loan. If you already know that you want to use this type of loan, then you will have to compare the personal loans. You compare the loans both on the conditions and on the interest. The largest cost item of a loan is the interest rate so you will have to compare the interest rates of the personal loans. You do the comparison online and once you have found a few lenders who can offer a favorable loan, you request a quote.
9) Do not borrow money from family or friends
Borrowing money from family or friends can be a cheap way to get money. But it often goes wrong when paying back such a loan. This can lead to irritation and does not benefit friendship or family ties.
10) Check the license with the AFM
The Netherlands Authority for the Financial Markets (AFM) supervises the lenders. So you know if the lender you want to take out your loan with is affiliated with the AFM that you are dealing with a reliable provider.
We hope that you can use these tips for taking out a loan and bear in mind that borrowing money always costs money.