Sometimes it happens that people take out a loan that they are not happy with afterwards, in which case a loan can offer a solution.
The loan ultimately turns out to be more expensive than you initially expected. The total amount of repayment and interest on your existing loan is higher than you would borrow the same amount again today. In that case, a loan can save you a lot of money.
What does a loan mean?
In short, a loan transfer comes down to the following. You take out a new loan with which you pay off your old loan in one go. For example, it may be that in the meantime the borrowing rate has fallen enormously, so that switching your old loan is interesting. The new loan has a lower interest rate and therefore lower expenses.
Moving a loan pays off
There are many different loans available and you can go to a lot of lenders to take out a loan. This makes the entire process of borrowing money cluttered if you are looking for the most suitable money loan. It is therefore not surprising that someone takes out a loan that he is not happy with later on.
After closing, you will discover that a cheaper loan with lower interest rates and better conditions exists at another bank. Crossing your old loan is the best option.
But can you just transfer your old loan?
Many families have taken out a loan for which they are no longer coming from. This has recently been given attention in the Radar television program. Since the closing of the loan, the interest rate has declined enormously, which makes a loan transfer interesting. However, in the terms of the loan it is stated that in case of early repayment a huge penalty interest is due so that early repayment is not interesting.
Of course, this is not neat from the bank where these people have taken out the loan, but the bank has the right to stick to the conditions.
Therefore, do not only look at the interest when you take out a loan but also at the conditions so that you can pay off without penalty in the interim. Read our article ” compare loans “.
Exchanging a loan, how does it work?
When you decide to transfer your loan, you take out a new loan from another or the same bank. Even if you still have to pay penalty interest, switching can be interesting. With the money from the new loan you will pay off your old loan. Because the new loan has lower costs, you could even borrow more money while the monthly expenses remain the same. However, a bank will never give you too much money. Maximum borrowing is not always wise. The bank looks for your income and monthly payments for the new loan amount.
The small print of the loan
When taking out a loan, always look carefully at the terms and conditions of the loan. In addition, be sensible and determine for yourself what you want to pay for monthly payments. Borrowing money costs money and it is a given that people do not always realize how much they can miss each month.
In order to prevent yourself being deeply indebted, you can be informed by the bank or money provider. This way you can take out the best-fitting loan. Whether you want to borrow a small amount or a large amount, avoid paying too much for your loan.
The terms of the loan therefore state whether you can redeem the loan early without paying a penalty interest. This allows you to always switch the loan and you have lower monthly payments.