5 cost traps that you can avoid the case of loans. Buying a car is coming up or you are planning a home remodeling. Very few consumers have so much money to pay for these purchases in cash. For this reason, credit is increasingly taken up, especially since the key ECB interest rates at historic lows is. Many banks and online banks offer attractive interest rates, which makes a loan makes sense. How to avoid 5 charges apply for loans. Finally, it should be paid to the cost trap for loans.
1) cost trap for loans
Who has a low effective interest rate obtained with a binding offer of credit, which can look forward to. But mostly it looks in practice different, because a loan pays off not only from the interest, there are other factors can increase the cost of borrowing. Many consumers suspect a hidden cost trap for loans, usually only found on high-risk loans with no credit search .
2) Be careful when taking a loan
But that's not so, because even with a normal installment loan hiding a whole lot of costs. The biggest cost in case loans are the interest rate charges. However, banks do not refer to this so, but there are terms such as credit increases, payment protection insurance, rates suspensions or unscheduled. A note to: credit charges are not permitted under the Supreme Court ruling.
3) The residual debt insurance
The consumer is asked to pay a security of the bank. With a payment protection insurance, the bank insured against default. Therefore, the consumer pays higher credit costs. Annoying is when the creditworthiness of the consumer requires a payment protection insurance is. Ie. No, there is no credit. But for a new Supreme Court ruling are costs for old payment protection insurance is not permitted, consumers can retrieve them himself.
But not only as a hedge of the Bank for a default is offered a payment protection insurance. Usually it is interpreted to mean that it is a hedge of the borrower in the event of death, sickness or unemployment. But to take out payment protection insurance is to say that they do not always come into action. So no insurance coverage is offered, for example in mental illness in most cases.
4) flexibility in loans
Who wants flexibility with a credit, the repayment or redemption, or even with increases who pays. So out of this flexibility is not the case costs for loans, the offer should be scrutinized. A predestined case of credit charges are the costs to the unscheduled. This contrasts with the bank that fear for their planned interest income.
Likewise, it comes in the suspension rate that can bring in financial difficult situations existential relief with up option. There are also additional costs for the credit increase. Anyone planning his credit well, under certain circumstances can prevent later necessary credit increase or maintain small.
5) SCHUFA-free credit
Moreover, the largest cost trap is at the SCHUFA-free loans. These costs are not hidden, but are openly stated. There are the higher interest rates than regular loans, which make these loans more expensive. Every funder or bank for loans without Schufa (no credit query) a greater default risk. That will be settled on the high interest rate.
Trust is good, control is better, in this case, it is compared. In order for a loan seeker find the best loan for him, he should compare different offers. Internet free online credit comparison becomes available that provide a quick overview and the actual conditions. It involves an individual offer, ie it takes into account the financial situation of the credit seekers. In addition, it makes sense to choose the right form of credit for a loan. So the special online car loans are for the purchase of cars, usually cheaper than an online loan has a general purpose. Those who observe these things, can handle a case of cost for loans.