Chasing a Lower Interest Rate

Changing banks and moving your private loan does not always mean better terms. Instead, it can cost you dearly. The search for longer interest rates can lead to higher interest rates – we explain more!

This Means Interest

First of all – what is interest? Well, when you take out a loan, you pay interest on the loan, i.e. A cost for being able to borrow money. Just interest is a big part when you borrow money and can vary a lot between different banks. Therefore, it is important to compare before you decide where you want to apply for a loan. Most often, it is the nominal interest rate that is stated, but the effective interest rate must also be stated. Nominal interest rate is the interest rate without other fees included, while the effective interest rate includes all costs with the loan, such as avi fee and arrangement fee – which actually affect the total cost of your loan. Compare the nominal interest rate with the nominal interest rate, and the effective interest rate with other effective interest rates.

The interest rate is individual

When you take out a private loan (also called annuity loan), and play online slot machines, you borrow money without collateral. Such a loan differs, for example, from a mortgage where the property is the collateral. Perhaps you dream of remodeling the bathroom, building a balcony or switching to new appliances in the kitchen? Then a private loan can help finance all or parts of that project. However, the interest rate for the private loan is decided by the lender themselves, depending on the risk they consider lending you money to be. The interest rate is therefore individual and based on your information in the application and your creditworthiness.

Changing banks does not always mean a lower interest rate

It is easy to think that you will get better casino real money australia terms if you change banks and move your private loan. But it can cost you dearly. The act on longer interest rates can indeed lead to higher interest rates! The tricky thing about changing banks too often is that you run the risk of never paying back the loan itself, but instead the whole process starts all over again. This is because you always pay a large amount of interest and a small amount of amortization at the beginning with new banks. This is simply how an annuity loan (i.e. Private loan) works – with all banks! So think before you chase a low interest rate, as it could be more expensive instead.