Avoid pitfalls when borrowing

If you want to take out a loan, you can make some mistakes – and those that cost unnecessarily money. What you should look out for when borrowing and what typical mistakes you can handle, you can find out here.

Dispo instead of credit: Delay borrowing

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Of course, no one should lightly take out a loan, but only after careful consideration. However, it is not very smart to use the convenient credit line of the checking account for a larger financing requirement . This can quickly become a cost trap with interest in the double-digit range. If you have used your credit line to pay for a major purchase and can not settle it promptly, you should switch to a regular loan as soon as possible to keep interest costs in check.

Borrow, but do not compare loan offers

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Sounds obvious – but apparently it is not. As a matter of course, consumers will compare prices to make the most of their purchases before buying larger ones. Before borrowing, however, only one-third of them make the effort to compare offers from various store or online banks. Despite low interest rates, you should not give up on a credit comparison. This is the only way to actually get the cheapest loan.

To misjudge one’s own financial resources

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Admittedly, the currently very low interest rates are tempting. “If I already take out a loan anyway, then why not a few hundred euros more than upholstery?” – some may think so. In fact, it is better to have a small reserve in reserve than to possibly get another loan. However, you should also keep in mind the monthly installment or the repayment term – one of them increases with a higher loan amount. Be realistic in calculating the monthly rate. After deduction of all running costs you should plan a maximum of 40 percent of the remaining income for the loan repayment. So unforeseen expenses do not put you in distress.

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