After much consideration, you have made the decision. You do not want to wait any longer and save even longer for your renovation, the construction of a new garden or another car. So you made the choice to borrow the money. You have calculated that you need around USD 25,000 and you need the entire amount in one go.
If you have decided to borrow money, you will be confronted with the following questions; how much money can I borrow? which loan form will I choose and which loan is the cheapest?
Renovation: Personal payday loan
If you borrow money to perform an improvement or renovation in your owner-occupied home, the choice is not that difficult. A personal payday loan is then simply the most suitable, since you can then deduct the interest from the tax. And that makes a difference.
If you have a different loan objective, you will have to make a well-considered choice between a personal payday loan and an ongoing loan. Which form of loan fits best?
Just as with a mortgage, how expensive or how cheap a loan is largely due to interest. So if you want to borrow money cheaply, the lower the interest, the cheaper the loan. Obviously make sure that borrowing money costs money.
The interest rate has never been as low as it is now.
With a continuous loan the interest is variable . The interest is generally slightly higher than with a personal payday loan. When the interest rate falls, your monthly costs fall with it. On the other hand, your monthly expenses rise when interest rates rise. Given that interest rates are now so low, it is more likely that interest rates will rise in the future than they will fall much further.
Personal payday loan
The interest is fixed with a personal payday loan. If you take out a loan today at an interest rate of 4.1%, you will pay this interest during the entire term. In the case of a personal payday loan you can therefore calculate exactly what the total costs are of the loan that you take out.
Duration of the loan
If everyone neatly redeemed their ongoing loan you could easily determine the duration and total costs of a continuous loan. But unfortunately it is not that easy. Many people withdraw money again in between. The consequence of this is that you must repay longer and therefore pay more interest in total. Plus you pay more interest, because the amount withdrawn is higher and you therefore have to pay more interest on it.
It is not for nothing that they often speak of a DEATH-walking loan . If you continue to withdraw money, you ultimately do not pay anything in on the total loan amount, you continue to pay a higher interest amount and this way you will never get rid of your loan. Should interest rates rise again in the future, it can be very annoying.
In addition, loan must be phased out from a certain age. If the loan still has to be paid in full, while you receive less income from your pension at that age and if the interest also starts to rise again
With a personal payday loan, the duration of the loan is already fixed in advance. You know exactly where you stand. During the term you do not have to deal with changing interest rates, so even if the interest rate rises, you continue to benefit from the low interest rate for which you took out the loan.
90% opt for a personal payday loan
More and more people are opting for a personal payday loan, now 90% of consumers prefer a personal payday loan over a continuous loan. And that is not so strange, given the above advantages.
So if you need an amount of USD 25,000 in one go, a personal payday loan is cheaper for the above reasons.