Borrow cheaper: combine small expensive loans
Do you already have one or more (small) loans? Then there is a great chance that you can save on your monthly payments. Even if you want to take out an extra loan, this is a good time to combine all your loans into 1 larger loan and thus save on your monthly burden.
The amount of the interest is partly determined by the amount of the loan. Borrowing a low amount almost always entails a higher interest rate than if you borrow a higher amount. If you have several small loans, you can almost always save a lot by combining them into 1 higher loan. Through our comparison you can find the cheapest loans. First add up all the small loans and find the best loan for that amount (plus any extra money needed).
Small, expensive loans
A washing machine on commutation, an outstanding amount with the credit card company, an overdraft on the account and yet another loan. It often occurs in practice. For all these small loans you often pay the main price in interest. The interest that a mail order company charges for paying a washing machine in monthly installments is often around 15%. Credit card companies also charge such interest rates. Overdraft costs on average around 11% interest.
|Washing machine and tumble dryer on installment||$ 1000||15%||$ 150|
|Average outstanding credit card balance||$ 2500||15%||$ 375|
|Overdraft payment account||$ 1500||11%||$ 165|
|Revolving credit*||$ 5000||9.9%||$ 495|
|New revolving credit **||$ 10,000||5.6%||$ 560|
A higher, but cheaper loan
Most banks charge a lower interest rate for higher loans. They do this, among other things, because, for example, the administration and personnel costs that are included in the interest are just as high for a small loan as for a high loan. The example above shows that the combination of loans can yield hundreds of euros per year. You can use this advantage to repay the loan (extra), so that you can get rid of the loan faster.
Can you always merge loans?
You can almost always pay off all aforementioned loans, a repayment arrangement, credit card or overdraft. This also applies to a revolving credit. In some cases you pay a small fine for early repayment of a personal loan. However, calculations show that it is usually still worthwhile to aggregate or transfer the loans.