What do you have to look out for in installment loans?
The idea of going to the bank and getting a sum with the help of the installment loan is tempting. Finally fluent again, finally being able to buy the dream car or go on a long vacation. This temptation can also be deceptive. Because many of the euphoria forget that from now on monthly burdens will come to you. This means that the top priority should be to work out whether you can afford an installment loan at all. However, the bank naturally also checks the creditworthiness. The income is compared to the expenses you have. If the amount is too small to live, the bank will not match the loan, possibly reduce the loan amount or require collateral. See http://soulsurvivors-themovie.com/one-of-the-best-places-to-look-for-personal-finance-is-online/ for a write-up
Important aspects for borrowers
Interest is another important aspect for the borrower. You can’t influence that, but you can find a bank that has lower interest rates. But how do you do that? Running from bank to bank and asking is hardly very productive. Right, and nobody has to do that. Fortunately there is the internet. Here you will find many credit comparison calculators that compare the conditions of the different providers. So you can quickly find a bank that offers the lowest interest rate. You shouldn’t think that between 5.99 and 6.49 percent, for example, is not a big difference. With a sum of 100,000 dollars, a 0.5 percent higher interest rate would amount to a sum of 500 dollars per year.
Application and requirement
If you want to take out an installment loan, you can go directly to the bank or apply for your loan online. In addition to the creditworthiness, which is a prerequisite for the approval of the loan, an inquiry is also made to credit record, the protection association for general loan protection. This means that if you have a negative entry there, the loan will not be approved. You get a negative entry if, for example, you have not paid invoices and a procedure is pending. All loans that are already running are also listed there. If you already know that you have a negative credit record entry, you don’t even have to make your way to a German bank. The famous credit record-free loan, which is offered again and again, is possible, but only through foreign banks.
Depending on your financial situation and your monthly income
The bank can ask for collateral. For example, many banks are demanding wage and salary assignment. This means that if you fail to make your payments, the bank can withhold your wages. In exceptional cases, a guarantee can also be requested. An outside third party acts as a guarantor and is used for payment in the event of non-payment of the monthly contributions. Some banks also require life insurance in the event of the borrower’s death. This would secure the loan amount. If the installment loan is a car loan and if it is taken out through the car dealership, it is not uncommon for it to be assigned as security. The vehicle serves as a deposit.