Looking for a loan? Do a credit simulation first!

 

Of course you prefer not to do it, but sometimes you cannot escape it: taking out a loan. The whole principle of borrowing money has taken on a rather negative name over time, and that is partly justified. The problem of borrowing money is called interest. You have to pay interest on a borrowed amount and that is right. Why else would someone else who is not a family or friend want to lend you money? He or she should still have something left over. However, the problem arises when you partner with a lender who isn’t trustworthy and offer you a contract full of legal gibberish, fine print and terms that you don’t understand most of.

Use this free simulator (tip!)

Use this free simulator (tip!)

In principle, you can always take out a loan. The only reason why this is not possible is if you are registered as a defaulter with the BKR, the Bureau for Credit Registration. This is to protect people who are unable to pay off their debts. In addition, you must be able to convince the lender that you are able to repay the money. For amounts up to a thousand or fifteen hundred dollars, this is usually not such a point, but it is certainly above that. Would you like to know if you are eligible for a loan and how much you can borrow? Click here to go to the online credit simulation:

Find out how much you borrow best

Find out how much you borrow best

To prevent this, it is important that you always do a credit simulation first. Here you simply enter a number of things, such as the amount to be borrowed and your income. The simulator then uses your data to see how much you can borrow. Moreover, it is often also possible to see which lender applies which interest rates. This way you can save yourself a lot of money. Especially on large amounts. An interest rate is always a percentage of the loan amount. For example, if you borrow 10,000 dollars at an interest rate of three percent, you must pay 300 dollars in interest. The higher the amount becomes, the more the interest and the more important the percentage.

Comparing pays off

Comparing pays off

If there is one type of loan where the smallest differences in interest already make a huge difference, it is a mortgage. This involves huge amounts of money needed to buy a house. The average price is usually between two and two and a half tons. You will also have to pay interest on this amount to the bank. Except because the bank wants to make money, there is an extra reason in this case. Because it is such a huge amount, the bank also calculates the risk percentage that you are unable to repay the money. If that risk is small, you can borrow more than if the risk is high. For example if you have a permanent contract instead of a temporary contract. A simulation of your credit is of course mandatory with a mortgage and quite complicated.

Borrow smaller amounts

Borrow smaller amounts

This is less important for smaller loans. Moreover, you do not necessarily have to knock on the door of a bank. There are also lenders where you can borrow smaller amounts, but often at a higher interest rate. In addition, you can also buy installment products at many shops and businesses. For example if you buy a car, or a refrigerator or washing machine. Keep in mind that you are able to pay the monthly repayment. If this is not possible, you will have to cut costs elsewhere, otherwise you will get into financial difficulties. Finally, nowadays you can also easily take out a loan online, just from your computer.