Almost all banks today offer installment loans for private individuals. Installment loans prove to be multifunctional financial products, not infrequently the purpose, duration and loan amount can be individually determined by the user.
Since there is no requirement regarding the intended use, consumers can benefit from individual use, and an installment loan can often be used for refinancing. Refinancing two offers makes sense especially if a bank offers significantly better conditions. In order to be able to realize refinancing, both providers must have the option of refinancing in addition to free use. In order to save as much money as possible, refinancing with the installment loan is primarily about finding an offer that can score points with a low interest rate. In addition, the repayment should also meet the individual requirements as best as possible.
Refinance installment loan – important factors
When refinancing an installment loan, consumers should pay attention to the lowest possible interest rate in order to compensate for existing costs for the refinancing. Costs for refinancing are not always incurred, this must be taken from the contract terms of the respective provider. The effective interest rate is of particular importance. In contrast to the borrowing rate, the effective interest rate includes all costs. The effective interest rate is often variable and is based on various factors, such as the term, loan amount and creditworthiness of the borrower.
In addition to the effective interest rate, it is also important to plan the term precisely. The term is decisive for the repayment of the loan, and the credit costs are also influenced enormously. A short term ensures a high liquidity burden and an increased credit default risk. However, a short term also offers numerous advantages. Due to the rapid reduction of the remaining debt, the credit costs are also low, which can be attributed above all to the fact that the interest costs are determined from the remaining debt.
Refinance installment loan? – Make a comparison on the Internet
Before you decide on a specific offer, you have to make a comparison. Numerous financial portals on the Internet make it possible to quickly and free of charge compare several offers with one loan calculator.