Saturday, 26 September, 2020

The guide to taking out cheap consumer credit


Consumer credit helps to pay all kinds of expenses to improve daily life, to carry out a personal project or to overcome a life accident. But repayment can be expensive when you don’t get good credit. This is the purpose of this article: to give readers the best tips for buying the cheapest credit possible.

Find a favorable consumer credit

Find a favorable consumer credit

The most effective way to reduce credit charges is to take a fixed-rate, amortizable consumer loan with predetermined payment terms. It is safer and more consistent than revolving / revolving credit with adjustable rate and variable repayment dates. Although a revolving credit is often accompanied by a low rate at the start of repayment, after a certain period, the rate increases at high speed to practically reach the maximum legal APR (Annual Effective Rate). Ultimately, the total amount of repayment of a fixed rate loan is always lower than that of a variable rate loan.

Based on the APR

To estimate a loan, consider its APR which is the most important characteristic because it indicates the overall cost of the loan. The APR facilitates the comparison of several consumer credit products. The credit with the lowest APR is the least expensive credit. To get cheap fast credit, you have to look for the lowest APR. The APR is a reliable indicator for evaluating a loan because it includes all the costs linked to the credit:

  • the nominal rate,
  • application fee,
  • additional costs,
  • guarantees,
  • The costs of opening and maintaining an account,
  • the costs of using a certain method of payment and other transaction costs,
  • insurance,
  • the cost of the valuation of the property in the context of a mortgage (not including the registration fees related to the transfer of property).

Take a restricted loan

Take a restricted loan

Loans without supporting documents such as personal loans and revolving loans are risky and cost more than credits allocated to a specific project. The assigned loan is used for a specific purchase: car, house, etc. It is more accessible because the lender knows what the money is going to be used for. In addition, for affected credits such as car loan and mortgage, the bank can seize the property in the event of non-repayment. And by taking a lower risk, it will apply a more competitive rate.

Competing financial institutions

The competition between physical and online banks offers some bargaining power to borrowers. To take full advantage of this confrontation, the pretender to credit must begin by comparing the offers of consumer credit on the market. Then, he should simulate his online loan to find the best rate by modulating the capital borrowed or the repayment period.

Redeem your credits

Redeem your credits

A loan repurchase makes it possible to swap out existing loans for a single fixed rate loan with a single monthly payment. Again, you just have to simulate your online credit buyout to take out a new loan that is easier to repay. This gives the household the opportunity to free up cash to finance other projects or to build up savings to deal with the unexpected.

Borrow a small amount

It will be easy to repay a small amount because the repayment period will be short and the total amount to be paid will be less. By lending a small amount, the credit company will take minimal risk of default and be more willing to lower fees and reduce the rate. But if the project to be financed requires a lot of funds, borrowing a small amount means paying part of the project out of your own pocket.

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