Almost everyone faces the problem in their life that there is not enough money available to fulfill a wish. This wish can vary from small to very large: a few loose euros for the parking machine to an enormous amount of money for the purchase of a house . The problem with the few loose parking coins can usually be solved by looking at your co-driver friendly, but with a house this is of course a completely different story. Other major events, such as a wedding or the purchase of a boat, often cost more than you and your environment can afford. Taking out a personal loan can then be a solution. But what are the consequences of this?
If you want to know more about (paying off a) personal loan, it is important to first understand for which purposes this loan construction is suitable. You usually take out a personal loan when you want to make a large purchase and you already know in advance what amount of money is required for this. You then determine the term within which you can and want to repay the loan. Based on this information, you go around the table with the lender and you come to an agreement in which the loan amount, the calculated interest rate and the term of the loan are recorded. Actually the ultimate answer to the question: how much can I borrow? An excellent construction in itself where all parties know in advance where they stand, but what if you now want to pay off your personal loan earlier?
Repay personal loan earlier and fines
Borrowing money costs money, everyone knows that. The lending party, on the other hand, often earns good money, just think of the calculated interest. If you want to pay off your personal loan earlier than the pre-agreed end date, the lender will miss out on income (calculated interest). A fine will then be charged to compensate for this lack. Since 1 July 2011, this has been 1% if the loan were to run for more than one year. For a remaining term of less than one year, the fine is 0.5%. However, not all lenders charge a fine for early repayment.
Cigar from its own box
At first glance, the solution therefore seems obvious: you should borrow wisely from a party that does not charge a penalty for early repayment. But beware, because with this reasoning you can come home from a rude awakening. With most lenders, the penalty-free repayment is nothing more or less than a cigar out of your own box: the interest rate on the loan itself is higher, so you have already paid the repayment fine for a long time before you have repaid a US dollar prematurely.