When it comes to installment loans, the borrower agrees equally high monthly installments. These serve both the interest payment and the repayment.
In comparison to other financing such as the discretionary loan or the partial payment function of a loan card, a installment loan is cheap.
What the installment loan is worth
The inclusion of a installment loan is useful in the purchase of long-lived assets, such as a car, a kitchen or large technical equipment, if you can not pay from the existing income. If the dealer offers a discounted or even free installment payment agreement, this is cheaper than the installment loan of a bank. Consumers are, however, critical of borrowing for pure consumption purposes, such as holidays, unless it is an investment in the future, such as financing a language holiday.
Many purchases can also be financed through the current account, but consumers pay too high interest on out-of-pocket loans , especially as these are additionally burdened with compound interest. When paying in part on a loan card account, the interest charge is usually even higher than for a disposition loan.
Make a loan comparison
Before you decide on a installment loan, you should first make a loan comparison.
Installment loans are provided by different banks and with different maturities. So that the consumer finds a favorable loan rates, it can free loan calculator to use for a comparison of the different offers. This shows him after entering the basic data such as the desired loan amount, the purpose and the preferred term, the cheapest offer. Decisive for the price comparison for installment loans is the annual percentage rate. The purpose of an installment loan is important, as banks offer special terms in some cases, such as the purchase of a vehicle. If the consumer does not need the installment loan for a purpose promoted by the Bank through discounted interest, he or she does not have to state the reason for the borrowing.