Personal loan is gaining popularity
Did you know that this loan form has quickly become more popular in recent years? This is mainly because a lot has changed with this form of borrowing money. We would be happy to explain the two biggest and most important changes for you.
Fine for early redemption no longer applicable
In the past, you were charged if you redeemed your loan early. This fine could amount to no less than 5% of the amount you wanted to redeem. Redeeming a loan with an outstanding balance of $ 10,000.00 fined you $ 500.00. Fortunately, this is different nowadays. The penalty for early repayment of your loan no longer applies to almost all providers.
Borrow money cheaper with a personal loan
Where in the past the interest on a revolving credit was higher than the interest on a personal loan, this has now been reversed. There is still a difference between the interest for a personal loan and a revolving credit, but the difference has now turned in favor of the loan form with the fixed interest and the fixed monthly term.
Are there any drawbacks?
The benefits of the loan have been clearly highlighted, and to be fair, there are quite a few. Nevertheless, we also notice in practice that there are some disadvantages to the loan. For example, some consumers experience that it is not pleasant that there are no interim withdrawal options. If you have repaid you cannot withdraw these amounts again. In addition, there is another disadvantage that is little discussed. If you take out a personal loan, your loan will be registered with the BKR . With a revolving credit, the limit of your loan is registered with your BKR. This is different with a personal loan. Your credit is then registered as follows, not only is your limit recorded, but also the interest payable during the term of your loan. So a much higher amount is registered than with a revolving credit.
Most recommended form of borrowing money
In the past, mainly revolving credit was offered. Much has changed in this. In the past, many forms of borrowing money were offered with special repayment methods. For example, revolving credit was advised where you only paid the interest on the loan. In addition, an investment product was advised to repay your loan. Fortunately, this doesn't happen anymore. In fact, the banks no longer offer interest-only loans.
With the personal loan, the interest was also higher in the past than with a revolving credit. This has also been an important change. The interest on the personal loan is now often lower than with a revolving credit. The difference can be as much as 0.4%!
But why is the loan the most recommended? You may think that this is just because of the lower interest rates. This is certainly not the case. The loan is the most recommended because it has a certain term and a fixed run-off. This way you always know where you stand.