If you want to borrow, you must take out a loan. Not a problem in itself, enough providers. For example, if you search for the word borrow money in Google, the loan providers will force themselves on you. But what should you pay attention to when taking out a loan? And where can you take out a cheap loan ? And of course there are different forms of borrowing money. Which form of a loan do you want to take out? Do you want a revolving credit ? Or would you prefer a personal loan ? Or do you just need a small loan and want to take out a mini loan? Questions that are important if you want to take out a loan. That is why we recommend that you read this article carefully before you take out a loan. It can easily and quickly save you a lot of money if you take the time to read more information. This makes it much more likely that you will take out an advantageous loan.
Why do you want to take out a loan?
Of course it makes perfect sense to you why you want to take out a loan, it can be to transfer your existing, too expensive, loans at an affordable price. But it may also be that the borrowed money is intended to purchase a car, boat or caravan. What you want to borrow for, determines what type of loan is best for you. Whether you want to take out a revolving credit or perhaps prefer a personal loan should largely be determined by the purpose you have with the loan. If you want certainty in your loan, choose the personal loan. If you choose a provider with advice, you do not have to think about this. The consultant can then guide you through the process of making choices.
Where do you want to take out a loan?
This may seem simple, but it is sometimes difficult. Suppose you have requested three offers and received the same offer twice, the same interest, the same monthly period. Which provider do you choose? The answer is probably that you choose the provider with which you have the best feeling. Yet that is difficult to indicate.
There are two types of providers. The direct providers, also called direct writers, and the intermediaries. The first are the major banks themselves, the second group are credit intermediaries.
If you choose these providers, you will probably do this because you have been a customer there for years, you know the bank, you know the banking products, and you may also have mortgage and insurance already run with this bank. It gives you confidence and a safe feeling. Clear, and certainly plausible reasons.
However, there is one major drawback. Borrowing money from the major banks is expensive. Let’s take Across Lender out as an example and compare it with the interest via an intermediary.
If you want to borrow $ 25,000 from Across Lender, you pay a higher interest rate. If you do this through an intermediary, you pay, for example, 4.1% for the same $ 25,000.
The “good feeling” and trust you have in your bank will cost you in this calculation example a small $ 1,000 if the entire amount is borrowed.
Borrowing money from intermediaries :
Borrowing money from intermediaries is borrowing money from someone or a company you probably don’t know. As we have already shown in the previous example, borrowing money from an intermediary is in any case often cheaper than with your own bank.
The intermediaries have a bad reputation from the past. Companies such as Spin Lender and Instant Care Bank have given borrowing from intermediaries this bad name. However, much has changed among intermediaries since the 2008s. The purchase premium insurance, where Instant Care Bank and Spin Lender made a lot of money out of it. It is true that insurance is still offered with a loan. The intermediaries, who work on an advisory basis, are also required to discuss the risks of death, disability and involuntary unemployment with you. And if necessary they will advise to take out insurance for this. They no longer receive this insurance if they mediate it. If they mediate insurance, they will charge the closing costs directly to you.
Are there costs for advice on taking out a loan?
Here we have good news for you. Loan advice is always free. In fact, this is regulated by law. No costs may be charged when advising on a loan. The intermediary is already rewarded for this by the bank in the form of monthly commission.