When you apply for a loan or personal credit, you must first consider the amount you need, taking into account that interest will be charged for each euro you request. In other words, the first thing that can increase the cost of your loan is to ask for more money than is really needed .
After choosing the loan amount, appropriate to both your needs and your economic possibilities
you must carefully plan the term and the repayment installments. Although a longer repayment period offers some repayment convenience (thanks to the lower monthly installments), remember that time makes the total cost of your credit more expensive, since interest rates will continue to apply for a longer period of time.
Consider is several commissions that can be applied to the same loan
Adding to each other, the commissions can significantly increase the cost of financing, especially if they are reimbursed together with the rest of the credit amount, thus generating interest on the commissions applied. The most frequent types of commissions are, for example:
- Opening commission (charged for granting credit to the customer)
- Study commission (the cost of assessing the viability of credit)
- Modification commission (the exchange price initiated by the customer)
- Early cancellation fee (partial or total)
- Delay commission (the penalty for non-payment)
In addition to the fees mentioned above, each financial entity may establish other requirements for different purposes. Often it is bank loans and credits that carry additional expenses, generated by the need to change banks, direct payroll, contract additional insurance or other related products . Keep in mind that some links may make your credit cost too expensive.
Some credit offers have a grace period
The lack allows you to reduce (paying only interest) or even eliminate the payment of your credit installments for a time agreed with your lender. However, although it can be a good help in some situations, you should not forget that you will end up paying more in total. Remember, time always makes everything more expensive.