To fulfill their wishes, many consumers take out a loan that has to be repaid in monthly installments. The borrower is free to decide how high the installments should be. But there is a rule of thumb, the smaller the rates, the longer the term. This also makes the loan more expensive, because the interest has to be paid longer. But a loan in small installments has advantages.
Terms of up to 120 months
Especially when buying real estate, long-term financing becomes necessary. A loan with a term of 120 months is not uncommon. Thereafter, as a rule, follow-up financing is due. But what was previously exclusively for real estate loans, is also increasingly offered for conventional installment loans. A loan in small installments is particularly ideal if the income is not very high. Such a loan guarantees the affordability of the installments. It does not help if the goals are set too high and at the end the installments can not be paid anymore.
What else is important?
A big advantage of a loan with small installments is interest rate fixation. During the repayment term, the borrower can not affect interest rate hikes. Conversely, he does not benefit from falling interest rates. Not every bank agrees to a loan with small installments of up to 120 months if it is not a real estate loan. The reference computers on the Internet provide the relevant information at which bank such a thing is possible.
In the comparison should be paid to the possibility of special repayments. After all, there is the rare case that a borrower comes to money and wants to replace the loan early. However, many banks demand a prepayment penalty for the lost interest loss. This option should also be taken into account when comparing it on the internet.
Credit in small installments with flexible adjustment
Some banks also offer low-rate loans with appropriate customization options. During the repayment period, the repayment term and the installment amount can be adjusted individually. An increase is also provided for a further capital requirement. This is a quick way to repay a loan.
Before a loan comes, the income situation of the borrower is checked first. The income plays an essential role, because the bottom line is that the borrower still has enough money left to finance his livelihood. When this point is clarified, the bank checks the information in private credit. It came in the past defaults or late paid bills, then carried a negative entry in the private credit. Under these circumstances, a loan is very unlikely.