If we are thinking of applying for payday loan consolidation, our goal is to get cash advance debt relief. Normally we look for offers that offer lower interest rates, however, it is not the only variable that influences the price. Therefore, before deciding on one or the other, we must consider small tricks that can help us save on our personal loans.
The 5 keys to saving with personal loans
Here are 5 tips that we should keep in mind if we want to pay less on our personal loans:
0% interest is not always cheaper
When we start looking for personal loans we can find offers of “0% loans”. This does not mean that the credits are free since 0% refers to the nominal interest (TIN) and does not take into account the commissions or the products that we must hire to access the financing we need. If we want to know the effective cost of credit, we should look at the APR.
Paying commissions before is better
If we have to pay commissions, the first thing we must do is try to negotiate with our bank to try to reduce or cancel them. If in any case, we have to pay commissions to be able to access the personal loans, it is better to make an effort and pay them before. Some entities offer us the possibility of integrating these expenses of the commissions together with the loan amount to pay it monthly. If we opt for that option, we will pay interest for both the loan amount and the amount of the commissions. The ING Naranja loan offers financing of up to € 40,000 to 6.95% (7.18% APR) and will not charge us any commission or have any mandatory linkage.
Amortize is cheaper, although it costs
Whenever possible, it is advisable to make amortizations, total or partial, in this way we will pay less interest since interest is charged on the remaining amount to be paid. Many personal loans do not charge a commission for early repayment. In any case, even if they charge us for it, we will pay less than if we do not amortize.
Paying more is paying less
When we apply for personal loans we can choose the period of time we want to invest in repaying it. The key is to choose the shortest time we can with a fee that allows us to pay comfortably. The less time we are paying the loan, the less interest we will pay.
The difference between a personal loan of € 10,000 with interest of 7.18% at 3 years or 5 years is almost € 800 in total. With the Cofidis Project Credit we can get up to € 15,000 with an APR from 5.06%, one of the cheapest personal loans in the market, and it also offers us total flexibility to change the number of our fees through its online platform.
Not all linked products are good
Many personal loans offer us rebates on interest in exchange for making connections such as domicile the payroll, use a credit card or hire insurance. It is important to make numbers and calculate if the price of the insurance or the fees of the card will be cheaper than the discount that they offer us.
In conclusion, to get the most out of our financing we should request a loan that suits our profile and with an APR that seems appropriate, in the case of paying commissions do it at the beginning, calculate if the linked products offered are worth the penalty, find the balance between monthly payments and installments and amortize whenever we can.