Sometimes it sometimes happens that you need money but can not wait until you have saved the amount together. A personal loan is then a good solution that can be realized in a relatively short period. But what exactly does this mean?
What is a personal loan?
With a personal loan you get the amount you want to borrow in one go into your account from a bank or other lender. You pay a fixed amount of repayment and interest each month to repay the loan. Unlike a revolving credit , a personal loan has a fixed payment term and often a lower interest rate. This means you know exactly where you stand and when the loan has been repaid.
What can this loan be used for?
The main reasons why people want to use a personal loan are:
- Buying a car
- Adjustments to the home
- Buying a holiday home
- Paying medical costs
Also, this loan form is often chosen when you want to transfer various credits such as a revolving credit or a credit at a department store. This allows the monthly payment to be reduced and / or the interest to be reduced.
Interest and redemption
The amount you pay to the bank or lender every month is determined for you. You can not determine this yourself. You pay the same amount every month. In this monthly amount is part repayment and part interest. You pay interest on the part of the loan that you have not yet repaid. As a result, the part you pay for repayment becomes larger and the interest portion becomes smaller and smaller.
The interest depends on various factors. For example, the level of the interest rate has to do with the market interest that the lender himself has to pay over the money. The higher the market interest rate, the higher the interest on the personal loan. In addition, the level of interest also has to do with:
- The amount of the loan
- Personal risk profile
- Additional insurance
Not everyone therefore has the same interest rate. There can be almost 10% difference between the highest and the lowest rate. This is possible because of the personal situation, but also because of the rates that the lenders use. For example, there may be up to 8% difference between credit providers for the same personal loan. Know the level of your interest? Our credit specialists will gladly help you determine the interest of your personal loan. Click here.
How do I qualify and how much can I borrow?
As with all other loans, you qualify for a personal loan by calculating the borrowing capacity on the basis of your income, fixed expenses and any other debts or credit profile. A check will also be carried out at the BKR (Credit Registration Office). This check is to check your payment morality. On the basis of this information, the amount of your possible loan is also determined. Your marital status and type of home also play a role in this. It is therefore not possible to say exactly in advance how much you can borrow and whether you are eligible for a personal loan. The maximum amount that can be lent on a consumer basis is € 75,000.
Reimburse personal loan
If you have taken out a personal loan with an amount of less than € 40,000, then you are legally entitled to repay the loan early. With higher amounts, the loan agreement often states the extent to which you can redeem early. If you repay early, the lender misses part of the interest and may charge a fine. This differs per provider, but the fine must comply with European directives.
Benefits personal loan
- A fixed term, so you know exactly when you are ready to pay off.
- A fixed amount of interest and repayment every month.
- The interest is fixed.
- Direct access to the loan amount.
- Interest deducting from the tax, if you use the borrowed money for the purchase, improvement or maintenance of the property.
Disadvantages personal credit
- Redeemed amount can not be withdrawn again.
- Interim repayment often not possible without penalty.
Excluding personal loans
If you have multiple personal loans, you can choose to merge them into a well-organized loan with often lower interest rates. Do you have one loan but do you want to ensure that you pay a lower interest rate on your loan? Then you can see if it pays to transfer your loan. Our credit specialists are happy to help you to see if you can save in this way. They give you expert advice and arrange it for you when a saving is possible.