Cash loan guide

Proper financing

The ultimative ratgerber for their cash credit

A cash loan is usually taken out of economic hardship or business necessity. The borrower puts himself in the dependence of the bank with a cash loan. If consumers make mistakes when taking out a loan, this has far-reaching consequences. This “guide for their cash loan” should help you to avoid these mistakes.

How the cash loan term made their credit more expensive

Many only compare the loan amount and the ” effective interest rate. Consumers try to catch a favorable cash loan through it. It does not matter what the cash loan is needed for. Whether it was for a car, a vacation or for business purposes. But the loan term is much more important. The longer you pay off your cash loan, the more expensive it gets. The other side of the coin: the faster you pay off the cash loan, the higher the monthly loan installment will be. You should think carefully before signing the contract:

  • Which is the optimal loan term for you?
  • What happens to the investment after the cash loan is paid off??
  • What major expenses are due during the term of the loan?
  • Include unforeseen things in their calculations as well.

Cash loan provider

Trust only banks that you know or. Enjoy a good reputation. We recommend that you research this carefully before taking out a loan. Help for it offers also the internet. Basically, the bank should have a german branch. This provides them with legal security. It’s also good to know: what experiences other borrowers have had in the past with their cash loan at this bank?

Cash loan contract

Before signing a cash loan, you should carefully check the following contents:

  1. Is the bank registered in germany.
  2. Can the loan agreement be changed in advance.
  3. If the bank waives an ” assignment clause.
  4. Are the credit costs (not the credit interest rate)!) exactly defined in the contract.
  5. Is there a repayment schedule to their construction loan .

If these points do not apply, caution is advised. In this case, you better look for another provider for their cash loan.

Cash credit and repayment

To each respectable cash credit belongs a ” repayment plan. Alternatively, information about the number of monthly installments, the amount of the loan installment and the amount of the last loan installment is also sufficient. Don’t be afraid to ask the bank what happens if you default on your cash loan. This is the so-called goodwill test. Here the bank should be accommodating up to 3 loan installments.

Cash advance and credit default insurance

Some banks offer their customers so-called credit default insurances in connection with a cash loan. This should z. B. In case of unemployment continue to pay the loan installments for up to 12 months. But be careful!

These insurances are very expensive. They drive up the cost of credit enormously. The monthly premium of the insurance is based on the loan amount. Contributions of 50 or 100 euros per month are quickly reached without paying off the cash loan. It becomes quite critical if the bank makes such insurance a condition for a cash loan. In this case, we advise you “hands off”. Unfortunately, these methods of selling a cash loan are not uncommon. This concerns not only small but also large and well-known providers. Think for yourself whether a credit default insurance for your cash credit really makes sense. Note that the cash credit remains still affordable for you.

Cash loan and interest

The cash credit interest rate is, next to the credit period, the factor that most strongly influences the amount of the credit installment. But not all interest rates are the same. A distinction is made between “nominal interest rate” and “effective interest rate. Further the height of the credit interest depends on their creditworthiness. This means that not everyone gets the same interest rate at the same bank. The banks’ advertisements are particularly tempting.

Do not be tempted by this. Mostly you do not get the advertised credit interest rate. Less than 3% of all borrowers have a small chance to get this promotional interest rate. It is not crucial with which cash credit interest the bank makes advertisement. What is much more important is how high your personal loan interest rate is for your cash loan.

Rescheduling a cash loan

Favorable cash loan interest entice to reschedule. Often it appears that this or that offer makes your construction loan even cheaper. Here you should consider some facts absolutely.If you reschedule a cash credit additional costs arise. Thus z. B. A renewed conclusion fee or other fees, which are raised with a cash credit rescheduling. Is the loan term the same? The cash credit becomes apparently more favorable in that one extends the credit term. In reality, the cash loan only becomes more expensive. Finally you pay then longer interest.

How high are the credit costs? Not infrequently, horrendous fees are hidden in a cash advance contract. In return, providers like to make the loan interest rate very favorable. No matter how the costs are defined. Whether interest or credit fees. Costs remain on the bottom line.

To determine whether a cash loan rescheduling really makes sense, compare the overall costs. What did you really pay for your cash loan in the end?. Add up all the loan installments plus all the loan fees and other costs. How to calculate what your cash loan really costs. You will be amazed at the result.