Are you looking for a loan with small installments to buy something big? Or would you like to use the currently low interest rates for debt rescheduling? With small installments, you not only relieve the household budget.
Financed with the right installment amount, you can sneak a peek at the RSV (residual debt insurance) without pulling “blank” in an emergency. With tips and examples, we show how you can also finance in the long term and still get out of debt quickly.
Financial advisors have been preaching for generations. Those who finance their loans in small installments do not pay off, but only interest. Due to the radical interest rate policy of the ECB – to set the key interest rate to zero – such “wisdom” can no longer apply today. Today, the term has become the all-rounder of seriously calculated financing. Of course, the borrower actually pays more overall financing costs over a longer term.
Only, in comparison to the past, the interest is so low that even with small installments there is a strong repayment. From a business perspective, low-income borrowers can currently afford to make bigger purchases than was previously the case. However, the scope of the multi-talent “runtime” is not yet exhausted. Even the expensive RSV can be declared a fight without exposing itself to an unmanageable risk.
Modern credit options, such as “unlimited free special payments”, refute the wisdom that a loan with low installments only allows slow repayments. The following numerical example will show how quickly loans can be paid off with long terms and low rates. If borrowers forego the RSV and act according to instructions, they are debt-free more quickly than with insured loans and high installments.
Everyone would like to have a loan paid out quickly and then repay it as quickly as possible. Borrowers like to calculate the maximum rate that they can pay under the given income conditions. But, unfortunately, there is no crystal ball that predicts your personal future. Real life risks – nobody can deny unemployment, illness and death.
Responsible credit planning considers the greatest risks and takes precautions. With this in mind, many borrowers are entering into an RSV. The contribution amount is not the same for everyone. Older borrowers often pay more than younger borrowers, and the tariffs depend on the provider. An insurance premium per applicant of around 10 percent of the loan amount is realistic.
A loan with small installments can allow you to do without the RSV. It is concluded with a rate that corresponds to the payable rate despite loss of income due to illness or unemployment. Anxious people also take out pure risk life insurance in the amount of the loan amount from an insurance comparison for a few USD a year.
If a net loan of USD 10,000 is to be financed with RSV, the financing amount increases to USD 11,000. For 323.90 per month (3.89 percent effective interest), the loan could be paid in 36 months. There is a total of 660.22 USD in interest costs and 10 percent for insurance cover 1,000 USD in contribution costs. As an example in the case of unemployment, we assume about half of the monthly rate.
10,000 USD net loan amount, financed as a loan with small installments without RSV for 72 months, leads to 155.64 USD monthly installment. The interest rate remains the same, despite the doubling of the term. A total of 1206.34 USD in financing costs will arise with the full term. At first glance, that’s 546.12 USD more interest. But the rate can be borne in case of emergency with reduced income.
A special repayment is available at 168.26 USD compared to the maximum portable installment load. This money goes to a savings book per monthly order. A special payment is initiated once or twice a year. After a good 32.5 months, the loan would have been repaid through the special repayments. In total, only $ 526.75 interest costs would arise.
Conclusion of the calculation example:
The bottom line is the financing option with small installments saves 1133.47 USD in borrowing costs. The loan is repaid faster and offers an additional liquidity reserve through the savings. If everything runs smoothly professionally and health-wise, but a major car repair has to be paid, the savings could exceptionally be used for this – instead of overdraft facility.
Financial institutions are happy to grant long-term financing with small installments, easily and with a good credit rating and adequate salary. With a poor credit rating and probably a tight budget, it is difficult to obtain a fair loan offer. Either a guarantor or co-applicant is required for the regular loan with low installments or a high level of security.
It tends to be easier to obtain a loan without additional collateral when borrowing privately. Good credit company and Good lender dominate the private loan brokerage market and have been working without media scandals for years. Loans with a long term from private despite poor creditworthiness are possible because investors share the real credit risk in the bidding process.
We recommend applying for a small installment loan from Good credit company. Not only private investors are involved through Good credit company, but also various banks. Advantage, despite poor creditworthiness, no chances of low interest rates are excluded.