It can seem so easy, quickly take out a personal loan.
Especially when you just have that beautiful car in mind or when you want to buy a new television that you can also buy on payment. Then you always see the warning: “Pay attention to money costs money”. What does this actually mean?
The urge to take out a loan
Who does not know that feeling that you would like to buy something now? That new television or maybe even that nice car that you happen to run into. Of course, it does not always have to be big expenses, buying new clothes can also be a big drain on your bank account. You do not have enough savings or you’re short of cash. But you still need these new stuff. The urge to buy can make you decide to take out a loan or buy something on payment. Something as simple as Afterpay that you often encounter at webshops these days is also a temptation to click on “Buy now”.
Perhaps the interest rate is so low that you just let yourself be persuaded to take out a loan now. There may be a lot of reasons to take out a loan. That this does not happen without extra costs does everyone know? If people sometimes want to look over something, it is the fact that borrowing money also costs money. The government decided a few years ago to start an advertising campaign called “Pay attention, borrow money costs money”. This campaign is permanent and the warning always comes back to an advertisement about a loan.
Campaign borrowing money costs money
Many people have shown that they are not always attentive when money is borrowed. Especially for those who are not at home in the financial world, the banking system with its various loans is often opaque. That is why there are various rules and laws to protect the citizen from borrowing money. For example, it is not permitted to request usury loans for a loan, or to provide a loan to someone who is in financial trouble. The AFM (Financial Market Authority) keeps an eye on you to protect you.
So there is something more involved if you want to borrow money. That is why the advertising campaign “Pay attention, borrow money costs money” is so prominent in the picture. There are a few things you have to pay attention to when you take out a loan.
Pay off the loan
When you take out a loan, the total interest that you have to pay back is based on the interest rate. This means that, in addition to paying off the loan, interest must also be paid. These are the costs that are meant by “borrowing money costs money”. The interest rate of a loan can vary considerably depending on the type of loan and depends on the amount of the amount you want to borrow. It is therefore useful to always look at the current interest rate before a loan is taken out. Or even better compare loans first and then choose the loan that suits you. Think of penalty-free repayments and flexibility and make sure you can easily pay the monthly costs.
Reduce the cost of a loan
If you want to borrow money quickly or look for a loan at your convenience, the same rules apply. However , you want to borrow 500 euros or fifteen thousand you will eventually pay back more than you actually borrowed. The interest you pay if you want to borrow 500 euros is higher and the term of the loan is shorter. But then both loans are similar.
To prevent you from borrowing too much money than you actually can financially support, decide for yourself what you can miss monthly on repayment and interest. Then look at what you can borrow for this amount in order not to get into trouble. Always look further than your own bank for taking out a loan. You can easily compare loans on a comparison site like ” My personal loan “.
But even with the tips above to reduce costs, the slogan ” Money borrowing money ” remains in force.