The best tips for your loan: Follow these tips for your loan and benefit from a lower monthly instalment

For the borrower, the size of the monthly instalment plays an important role. If it is rather high, it can lead to payment difficulties, which can harm future loan applications. That is why it is worth securing a small instalment in order to reduce the risk of arrears. Below we present three tips that help you keep the monthly instalment on your loan as low as possible.

Choose a longer term for your loan

The following relationship exists between the loan term and the monthly instalment: the longer the term, the smaller the monthly instalment. As the terms currently offered range from a minimum of 6 to a maximum of 120 months, this leaves considerable room when choosing the contractual loan term.

Although the total cost of the loan is somewhat higher with a longer term, we still recommend taking a loan on these terms for safety. The lower instalment you obtain this way remains easier to manage each month. There is therefore a smaller risk of no longer being able to pay it and running into payment difficulties that would damage your credit scoring and later loan applications. To protect yourself against such complications, you can also take out voluntary credit insurance, which covers the instalments for you in the event of incapacity for work or unemployment.

In addition, you can repay the remaining loan at any time before the end of the contractual term, so that you receive back the interest that would still have accrued.

Use currently low interest rates to refinance existing loans

Thanks to the particularly low interest rates at present, monthly loan instalments come out smaller. This also applies to existing loans, because they can be refinanced with a new, cheaper loan. As mentioned above, when you repay these running loans early you benefit from a refund of the interest payments that would still have been due. On your new loan you can also deliberately choose a term that reduces your monthly instalment so that it matches your personal needs.

It is also worth noting that homeowners generally have a very good credit standing. For that reason they benefit from the lowest interest rates and thus also from a smaller loan instalment.

Compare the different offers from the banks

The loans offered by the banks differ in amount, term and interest rate. In addition, their final offer depends on their budget and approval criteria, which also differ from bank to bank.

Depending on the terms you want for your personal loan, it is therefore important to find out about each bank’s loan conditions so that you apply at the right bank. Collecting this information on the banks in question can, however, be tedious. That is why we recommend our loan-comparison service. With it you can quickly and with little effort get a clear overview.

Bonus tip: Submit your application through a loan broker

It is even simpler and more worthwhile if you submit your personal-loan enquiry through a credit broker. Instead of applying for loans at several banks yourself – which would harm your credit score and thus later applications – a single application is enough with a broker. From experience, the broker knows the approval criteria and the terms offered by the various banks and will therefore forward your application to the bank where you have the best chance of the loan you want. A loan broker will also optimise your application and increase the likelihood that you receive a loan on the desired terms.

Before forwarding your application to a bank, a broker will also review it to make sure that this really is the right moment to apply. If that is not the case, because you would not receive approval at this time, your application is not forwarded to any bank. This avoids an unnecessary rejection and its registration with SCHUFA, which would also harm later loan applications.

Conclusion

As these tips show, you have several ways to obtain a lower monthly instalment on your loan. In summary you should therefore choose a rather long term and find out about the conditions of the various banks so that you apply with the one that offers the terms you want. If you have outstanding personal loans, leasing or credit-card debt, you should refinance them in favour of a cheaper loan at a lower interest rate and a lower instalment – and thus save. At Mutuo Gruppe.de you currently receive a lowest rate from 2.7%, which can be well worthwhile for refinancing.

You can benefit from further advantages if you submit your application through a loan broker. A broker will optimise your application and thus help you obtain the loan that fits you. In addition, a broker will run the application process with the various banks for you in order to collect their different offers, which means less effort for you. If you are interested, submit your free enquiry online with Mutuo Gruppe.de right away. As we cover 90% of German loan offers, we will certainly find the best possible offer for you.

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