Your household budget does not have to empty the repayment of larger loan requests. Long installments keep installment payments small. Your loan financing for 84 months ensures you low-interest rates and low installments.
When looking for a loan, you should not only look at the interest. With the “free special repayment” loan condition, you can keep your installment loan as flexible as you would like it to be. With our loan advisor at maturity, we will inform you why it is worth taking out in the long term and paying off quickly.
84-month loan – long term loan
Financing a loan for 84 months is a classic model of long-term financing of a consumer loan. Credit institutions have no restrictions on the use of the loan. A long-term loan can satisfy consumer wishes, summarize existing loan obligations or invest in real assets. However, it is always worthwhile to enter the actual purpose of the loan comparison.
Perhaps this will open up access to a special offer that would not have been offered to you if you were “free to use it”. – Because, in the long term, most consumers want to finance large amounts of loans. Long terms open up the scope in order to reconcile high net credit with affordable installments.
With a large credit volume and a long term, every percentage point behind the decimal point is of course important. But, the real cost drivers often overlook borrowers in their hunt for the cheapest rate. Because, to secure loans, consumers like to play it safe.
Nobody can look seven years into the future. The affordability of the loan, in the event of unemployment or illness, many consider insuring even with shorter terms. Only optional credit insurance protection is not shown in the effective interest rate. This means that the residual debt insurance is almost invisible in terms of financing costs. Consumers often only realize how expensive borrowers are to make this decision if they later want to reschedule their debt. Credit insurance costs about 20 percent of the loan amount. In the event of early repayment, the contributions will not be calculated back.
Long term – save Residual Debt Insurance and pay off quickly
Credit can be financed for 84 months, at least in the case of medium loan amounts, as an invitation to waive the Residual Debt Insurance. Borrowers are happy to finance 60 months of average loan requirements, for example, 15,000 dollars for debt rescheduling or free use.
The monthly installment payment, the effective interest rate of 3.89 percent regardless of creditworthiness, is USD 275.05. (Credit example, 15,000 dollars net loan, term 60 months, as of April 2016). In total there are 1,502.80 dollars in financing costs without Residual Debt Insurance.
In the individually researched case, the Residual Debt Insurance would add 18.8 percent of the loan amount for insurance protection (2,820 dollars). This increases the financing costs to 4322.80 dollars. The monthly rate is now $ 322.04. If the same amount were financed without Residual Debt Insurance as a loan for 84 months, the bank will charge 2119.83 dollars effective interest. (The interest rate does not change due to the extended-term). Monthly would be paid 203.81 dollars. Compared to the loan with 60 installments and Residual Debt Insurance, the installment burden is reduced by USD 118.23 / month or USD 1418.84 / year.
The Residual Debt Insurance can be saved because the rate is so low that it can still be used in the event of illness or unemployment. Only the period of sickness benefit and ALG1 may be counted. The majority of current credit insurance policies exclude ALG2 and permanent disability.
There remains the credit risk in the event of death. Insured for 7 years, the Community Life Protect calculated for our sample request for comparison purposes, 50.64 dollars per year. This means that, with the same monthly charge as for the Residual Debt Insurance loan, 1,368.20 dollars are available for special repayments.
Profit-oriented credit planning without a Residual Debt Insurance pays off
With special repayment free of charge, the loan can be paid for in 84 months, without a cent extra, in 54 months. Affordable monthly installments hedge real risks through affordability. In the event of death, life insurance covers the remaining amount. The insurance contract is concluded for the full amount of the loan so that the company even pays out excess amounts.
If problems arise that Residual Debt Insurance would not insure, the financing model shows additional strengths. For example, the car has to be repaired, then it is not necessary to use the expensive overdraft facility to settle the bill. The money for the special repayment is finally in the savings book. Dedicating it once, paying a little differently with it, extends the intended term, but it saves overdraft interest.
Loan for 84 months with restricted creditworthiness – loan offers?
“Taking over” financially has a significant impact on the creditworthiness of the loan. Regular credit providers refuse to cooperate if they wish to finance a loan for 84 months as soon as the credit rating deteriorates noticeably. The reason for the loan refusal is simple to name. As the “guardian of creditworthiness”, the score has replaced manual credit checks in almost all credit institutions.
Bank loans with a poorer score offer “risk providers” if the credit check by hand refutes the bad score. Overall, the process is more complex, and financing becomes noticeably more expensive. An alternative would be to apply for a loan for 84 months through private donors. Good Finance, recommended by our loan comparison, offers a reputable environment for risk-free online financing from private individuals.