Credit Tips – You Should Know!

Credit Tips - You Should Know!

For all those who like to get information before they take out a loan online, we have once researched on various advice pages and summarized the best credit tips in an article.

If you take one or the other of our tips to heart, you can be sure that you can save money on debt and not get ripped off.

Tip 1: Before the loan application is the comparison

Tip 1: Before the loan application is the comparison

Before starting a loan application with any bank that offers cheap credit, you should always make a loan comparison. There are a number of reputable comparison portals where credit seekers are presented for free to the best providers. But beware, credit comparison is not equal to credit comparison. Do not compare apples with pears. It needs to be made between proposals with a rating dependent and offers with excellent credit ratings un-related interest rates. Either or a direct comparison is not possible because credit-dependent interest rates change significantly depending on the credit rating from case to case.

Tip 2: Always take the effective interest rate as a benchmark

Tip 2: Always take the effective interest rate as a benchmark

Banks must always specify the effective interest rate in addition to the favorable nominal interest rate, and this must be used in a credit comparison. The effective interest rate makes loan offers from different providers comparable , because it also includes the additional costs of credit.

Tip 3: Beware of credit intermediaries

Tip 3: Beware of credit intermediaries

Some consumers want to make their job easier and turn their credit application to a credit intermediary, which should give them a cheap loan. Be careful. There are black sheep among the mediators, who already charge for a loan before paying, which a customer should pay in advance. That is dubious. Reputable credit intermediaries such as Dr. med. Klein, whose help is particularly appropriate when it comes to mortgage lending or a credit bureau-free loan, only charge a success commission. Creating an offer should always be free.

Tip 4: Dispo or installment loan

Many consumers use the dispo if they want to get additional liquidity or make smaller purchases. Here should be a rule of thumb, the dispo is always recommended only if it can be returned within three months. If repatriation is not possible within this period of time, it is better to take out a short-term installment loan.

Tip 5: On Demand Loan the Alternative to Dispo

Tip 5: On Demand Loan the Alternative to Dispo

The fact that the MRP is a very expensive loan product due to the high interest rates is known to most consumers. Nevertheless , many stumble into the dispenser , though that does not have to be. There are cheap alternatives in the form of call-off loans that some banks hold for customers. A call-off loan is not tied to the account and therefore easy to apply for. Call-off loans are also framework loans from just at significantly lower costs.

Tip 6: Cost trap residual debt insurance

Tip 6: Cost trap residual debt insurance

Especially if a lot of time has been invested in a credit comparison in order to obtain the best possible installment loan, it is annoying if the cost advantage is canceled out by the conclusion of an expensive residual debt insurance. The residual debt insurance is a voluntary matter and usually not necessary for installment loans. Avoid the completion of a residual debt insurance and you save a lot of money.

Tip 7: Cheap car loans from the Autobank – here is often deceptive

When purchasing new or used cars, many customers are faced with the question of where should the financing be handled, which is cheaper. The installment loan from the Autobank lures with low interest rates, but can be the bottom line, more expensive, because the dealer is then not willing to grant a large discount. Which is the most cost-effective option, can be calculated if you can create corresponding offers.

Tip 8: The credit bureau – a book with seven seals

Tip 8: The credit bureau - a book with seven seals

Since the credit bureau information plays a central role in connection with the borrowing, you should at least once a year request free information from the credit bureau to check to what extent all stored data is correct. So you can take countermeasures in time if the credit bureau has stored data that is not correct.

Tip 9: Credit without credit bureau – not always the first choice

Tip 9: Credit without credit bureau - not always the first choice

A loan without credit bureau is meaningful only if the credit bureau information is negative and the banks do not want to grant credit. If it’s just a question of taking out a loan that no-one is experiencing, it’s time to consider the costs and benefits. Loans without credit bureau are always significantly more expensive due to the higher risk that foreign banks take here and the commission paid to the intermediary.

Tip 10: Choose the right repayment term

Tip 10: Choose the right repayment term

Many consumers tend to make the repayment term long enough for rates to be low. This is not necessarily an advantage because long-term loans are usually more expensive and have a higher credit risk. Long maturities are rather not recommended. Importantly, the monthly installment can be conveniently paid out of disposable income.

Tip 11: Beware of debt trap

Tip 11: Beware of debt trap

Before a loan is taken, if there are other obligations, it should always be calculated whether you can afford another rate. It must also be remembered that income and life situations can change quickly due to unemployment or separation from the partner. Once the debt trap has snapped shut, it is not so easy to escape this.

Tip 12: What to Watch Out for

Tip 12: What to Watch Out for

Those who sign a self-enforceable guarantee for someone else must be aware that this guarantee reduces their own credit rating. In other words, anyone who intends to take out a loan in the foreseeable future should not assume a guarantee if the income situation is only average.

Tip 13: Reschedule loans sensibly

Tip 13: Reschedule loans sensibly

If there are multiple loan commitments, it may be useful to group them into one loan when interest rates are favorable. This saves costs and improves clarity.