A lot of lenders nowadays advertise with low interest rates. The interest is then, for example, 2% lower than at a bank. However, providers often ‘forget’ to state that the interest mentioned is an interest rate. In many cases, this starting interest also applies for only one or two months, after which you pay a higher interest. In reality, it therefore does not always have to be cheap to borrow ‘cheaply’.
This is why you have to pay close attention to a number of things. The monthly repayment and duration is one of these. A low interest rate with a longer term does not necessarily have to be cheaper than a higher interest rate with a shorter term. A low interest rate may be attractive, but do not forget to set it off against the term of the loan. With cheap loans, in many cases, an (extra) insurance is also part of the loan. In most cases it is a so-called term life insurance. You pay extra for this insurance on top of the interest on the loan. With many cheap loans, such additional insurance may be mandatory.
Many loan providers advertise as said with low interest rates. In many cases it appears to be only an interest rate that later turns out to be a variable interest rate, which means that you will pay higher interest rates over time than advertised. Many lenders also advertise with a special offer, or rather; baiters.
For example, you can receive free gifts, such as a camera or coffee maker, that afterwards turn out not to be free at all. A lender can recoup the gift by charging a higher interest rate, closing commission or term cover for the loan.
Nowadays you can borrow money cheaply via the mini credit or the mini loan. You then borrow an amount below $ 1,000 that you must repay within a month. This is particularly useful when you need a small amount within a short period and you have the money to pay it back quickly. However, a mini-credit does not have to be cheaper if advertised. If you do not pay back within the term it may be that you pay a high fine or the interest may be quite high.
For your own safety, your payment history will be tested at the BKR. All credits between $ 500 and $ 12,500 with a minimum duration of three months are registered with the BKR. Certain mobile subscriptions are also registered. If you have payment arrears you will receive a negative BKR listing. It then becomes more difficult to apply for a new loan, to protect you from falling further into debt. Lenders of the cheapest personal loans often do not perform a BKR check. This means you are not protected against yourself and you run the risk of getting deep into debt.