People are becoming bolder in borrowing, probably because of low credit rates. You commit to a loan for many years to come, so think carefully about what exactly you need and how you will be able to repay it. In this article, we’ve collected some important tips for successful borrowing.
It’s a good idea to think first and quantify if it’s really worth borrowing ?! It is imperative to consider and calculate as a loan is a long term commitment and you need to make sure that you can pay off your installment every month/week safely.
Of course, before the loan is disbursed, the bank will check your income statement to calculate the loan amount and installment. It is important that the installment payment is no more than you can actually take. For example, if you pay 50% of your salary, you need to make sure that the remaining 50% covers your daily needs (utilities, bills, food, etc.);
The initial installment, initial cost, APR, interest, etc., are important factors to consider before choosing a loan, but not individually, but together. For example, the interest rate may be favorable over a 3-year period, while for a 10-year period, interest may be up to 2% higher than a home purchase. For a 3-year period, the bank may set a new interest rate every 3 years, but a 10-year interest rate may be safer, but if the central bank base rate and economic indicators are not changing much, a lower interest period may be more favorable. There are also start-up costs that we have to finance in advance and get back from the bank after a successful contract. Therefore, it is important that you decide on the big picture and the factors that are important to you.
It is worth taking out insurance in the event of serious damage to the collateral property, but it is important to insure it (especially for manual workers) in the event of loss of working capacity, health or even loss of life. The devil is not asleep, and anything can happen during the loan term, which is why you should think carefully about it.
An old loan may not be the best deal for you in the years to come, so it’s a good idea to open your eyes and look around the market. It is possible that there is a banking product that, if you replace your current loan, can provide you with a better deal and save a significant amount.