For many, credit terms are something set in stone, facts that the bank dictates and that the customer must accept if they want the loan. But that's not true. Customers have several options for positively influencing the adjustment screws for their credit and credit conditions.
Creditworthiness plays a particularly important role. The purpose of the money also plays a role or what collateral a borrower has to offer.
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Tip 1: Ensure good creditworthiness
Consumers who want to take out a loan in the foreseeable future should first take care of their own creditworthiness. Anyone can easily find out exactly what this looks like with the help of a self-assessment from the Schufa. Once a year has everyone has the right to a free self-assessment. If you want more detailed information or would like to be informed regularly, you can have further information sent to you for a small fee. If, for example, there are warning notices, loans were not repaid on time or there were problems with an installment payment at a mail order company, this information can all be found in the Schufa and influence the creditworthiness of a consumer. If there are incorrect entries, anyone can request the deletion of this information upon presentation of appropriate documents. It is worth meeting your payment obligations on time, at the latest when you take out the next loan.
Tip 2: The purpose
The reasons why consumers take out credit vary widely. Some fulfill a long-cherished dream and go on a trip around the world with the money. Others buy real estate or a car. Sometimes a loan is urgently needed because the Washing machine has given up the ghost. Here can one Express credit with immediate approval and payout on the same working day help.
Customers should state the intended use as precisely as possible. It can lower interest rates on loans. This is because some uses mean greater security for the bank, such as a home loan or a car loan. Here the bank has a usable countervalue in the event of a default. The risk of a total failure is significantly reduced. Many banks reward this additional security with a lower interest rate. Disposable loans are usually more expensive because there is no additional collateral. Of course, there is not a cheaper loan for every purpose. The purpose must provide additional security.
Tip 3: The loan term
A long loan term always means a higher risk for a bank. Over time, a borrower’s living conditions can change significantly, for example becoming insolvent due to unemployment or serious illness resulting in non-payment. The longer the term, the greater this risk for the bank. The bank passes this risk on to the borrower in the form of higher interest rates. In order to get the best possible conditions, the term should be as short as possible. Of course, it must be ensured that the borrower can also pay the monthly installments, the amount of which also depends on the term.
A longer term is associated with a lower installment, the monthly burden is lower, which makes it easier for the borrower to pay the monthly installments. Using a budget book you can get a better overview of income and expenses and find the right installment amount, so that the term and monthly charge are in Balance are.
Tip 4: Take out a loan for two
The chances of getting better loan terms increase when there are two borrowers. For the bank, the second borrower with his own income means additional security. The default risk for the loan decreases. This option is particularly interesting for applicants who have a low income. The second borrower not only increases the chance of more favorable conditions. It increases the chance of getting a loan at all.
Many banks pay attention to marital status when lending. Banks prefer a married borrower with children to a single one. If, for example, there are layoffs in a company, the independent employees are more affected than colleagues with families. If the spouse also works, this further reduces the default risk for the bank.
Tip 5: Always compare offers
Consumers who need credit should, as with any other major purchase, such as a new one Home Theater System, always compare the prices and conditions first. It takes a little time to obtain corresponding offers from several credit institutions. But mostly it's worth it. With higher loan amounts or longer-term financing, the conditions can differ significantly. Even if the difference in the interest rate is only small, this makes itself felt financially with a longer term. The effective interest rate is particularly meaningful and above all comparable. It is a good basis for a loan comparison because it not only includes the expenses for interest payments, but also all costs and fees for the loan.
Conclusion
A cheap loan is usually no coincidence. Consumers who need a loan definitely have the opportunity to make important adjustments and thus secure good loan conditions. Creditworthiness is an important factor. But the personal impression is also important, for example when the bank receives complete and well-sorted documents. A loan comparison and a second borrower can also ensure better conditions, as can specifying a purpose for the money.