Before we start out with Where to apply cleverly for a loan in order to have the biggest chances for success, we take a look at the How:
1. Find the right amount of the monthly instalment
At Point 5, you will use loan calculation tools that show you a preview of the monthly loan instalment.
Before you apply for a loan, you do not only need to know how much money you want to get, but also what maximum monthly loan instalment you can bear.
Let’s assume that you can afford a monthly instalment of Euros 400. However, please do not agree on a loan with a higher instalment than Euros 200!
Why is this important?
Admittedly: sometimes, people are astonished when reading this advice, or become even angry, because they think they should live below their possibilities!
This advice represents a very important security line and is therefore also on the first position.
This is your security line!
Think about it: if you calculate your loan instalment too just, you will lose your financial flexibility, if something comes up.
And the probability that a financial challenge arises, such as a bigger reparation in the appartment or of the car, during a loan term of several years is very high, as you might admit too. 😉
If you do not have freely available money, you are quickly facing the decision, whether to solve the urgend financial problem or to pay the instalment timely. Often, the circumstances take the decision for you: your current account is empty and the debit of the instalment is cancelled by the bank.
Now you have serious problems: you will be prompted to transfer the loan instalment immediately or latest the following month plus the incurring costs. How easy is this for you, when you do not have any money left?
This is often the beginning of bigger problems: at the Schufa – this is virtually the central German register for loans – you will be stored as an unreliable borrower. With this, your creditworthiness score decreases and in the future, you will only get loans with higher interest rates or almost not at all.
If you already have a “negative Schufa“ and want to get a loan anyway, please take a look at our Advice #4.
How to do it right:
Let’s stick to the Euros 400 for the monthly repayment of the loan. You agree on a loan with a monthly instalment of Euros 200 and start to transfer Euros 200 monthly to a savings account.
Most often, the loan bank debits automatically from your current account. Please set up a standing order for the savings account.
Why is that a good solution?
You remain flexible and if problems come up, you will have enough financial margin in most cases to handle them easily. You can, for example:
- pause the savings transactions for the savings account anytime– this does not affect you loan agreement at all,
- pay bigger reparations with the savings account, without having to take a new loan,
- pay the monthly instalment for the loan with the savings account, if you should temporarily not have income (unemployment, boss does not pay salary).
… and if everything should be according to your plans, you can cancel the savings account and repay the loan completely after half of the loan term (unscheduled repayment). If this is your only loan, you would be subsequently debt free.
Applied correctly, a loan can be very soothing!
There are people, who got quite used to the savings rate and were pleased to have saved money, so they now want to start to build a true fortune. Tips on this subject are in further articles on this special portal.
Go directly to the ultimate advices #2 to 5
- 2. More success through second borrower!
- 3. State income completely!
- 4. How to get a loan with “negative Schufa”!
- 5. How to get lower loan interest than anybody else!
A little request to you 🙂
Please write me about which advice helped you the most and which you could recommend to others.
This feedback contributes to improve the situation for all loan searchers. Many thanks!