Which loans can you transfer (tips) Everything about financeOn June 6, 2019 by Earl Meyer
Did you take out a loan in the past at a certain interest rate. The interest rate is considerably lower at the moment. You can probably benefit from this. Transferring an existing loan is fairly easy. By taking over a loan, your monthly expenses will certainly go down. You may also have canceled your loan earlier.
There are many advantages to taking action now in order to reduce your fixed costs. That way you will also get extra support from the switching service that most lenders offer. In this way all worries about relocation will be taken out of your hands and you don’t have to do much of yourself.
Which loans can you transfer?
There are different loan forms. The best known are the personal loan and the revolving credit. Other forms of lending are the red on your bank account and the outstanding debt on your credit card. You can override these loans. By replacing the loan with a loan with a lower interest rate you can save a lot of money.
Also items that you have purchased online that are on payment can be included in a new credit. Very handy, you only have your entire debt with one party. This not only makes things clearer, but you also need insight when you are done with the entire debt.
Do you have to pay a fine?
No penalty has to be paid for paying off a debt on your credit card and standing at the bank. Also for repaying a revolving credit with a new loan no penalty has to be paid. Paying off an existing personal loan with a new loan is not always fine.
Sometimes a fine
Some lenders charge a fine. They may do so, but the fine may not exceed 1 percent of the loan amount. Do you have to pay a fine? Then check whether you do not have to pay more than is legally permitted. When determining whether it pays to take out a personal loan, you must therefore take into account the fine to be paid. You usually earn back the paid fine within a few months. Even if you have to pay a fine, transferring a personal loan is therefore usually worth considering.
Are you eligible for the new loan?
Do you want to save on your monthly expenses by taking out a cheaper loan with another lender? That other lender, of course, wants to assess whether you are able to meet your payment obligations. He therefore looks at your income and your fixed costs. He will also look at your payment history. Have you repaid your loans correctly in the past? The lender of your new loan will check this with the Credit Registration Office. Is your new loan higher than the loan that you want to transfer? Then the new, cheaper loan will most likely be provided.
Choose a shorter duration
Are you taking over an existing loan? Then consider choosing a new loan with a shorter duration. With a loan with a shorter term, you pay off a larger amount per month. The amount on which you have to pay interest therefore falls faster. You therefore pay interest over a shorter period. This can result in considerable savings.
Try to avoid high interest rates
Do you have several small loans? Remember that you usually pay a higher interest rate for small loans than for a large loan. Do you have a lot of small debts? Then you can save interest by taking out a large loan. With that large loan, you then pay off your small personal loan or revolving credit, your credit card debt and your bank account balance in one go. You then have lower monthly payments. Moreover, with a loan you have a much better overview of the monthly costs to be paid (repayment and interest).
Beware of a temporary promotional interest
There are lenders who try to seduce you with a temporary promotional interest. Does it seem advantageous to transfer your existing loan to that lender because it is requesting a considerably lower interest rate than your current lender? So don’t forget to check whether it concerns a temporary promotional interest. After all, with a temporary interest rate you are ultimately more expensive than expected.