With a few tricks, you can significantly reduce the cost of your next loan. We’ll tell you what’s important and what sets the pace for really fast results.
Credit Tip1: Check private credit data
Negative features in the private credit deteriorate your credit rating, which leads to higher interest rates and thus to rising borrowing costs. It is a fact that about 50 percent of private credit’s data is outdated or simply wrong. Your credit rating may be less appreciated by banks than it is – simply because the basis for the calculation is wrong. Therefore, anyone who wants to take out a loan now or in the foreseeable future should regularly check their data with the private credit. This is possible once a year free of charge (the complete instructions are here).
If you find obsolete or incorrect data during the search, then contact the private credit and ask for a correction or deletion. Important to know: If, for example, a private credit entry is made because of an unpaid invoice, it must be an undisputed claim . If you have filed an objection because you consider the claim to be wholly or partially unjustified, then NO private credit entry may be made in this case. However, if your creditor has sent information to private credit, you may request the cancellation and, at the same time, possibly claim damages from the creditor.
Unfortunately, you have a handle against justified negative entries at the private credit. But you can ensure that no new entries are added. Pay your bills on time, respond to any reminders, and seek installment payments from creditors whose claims you can not meet directly. This is much better than getting into a spiral of debt collection, dunning and judicial dunning.
Always remember: a “clean” private credit will bring you measurable financial benefits, because you will get credit noticeably cheaper.
Credit Tip 2: The Two-Thirds Rule
Do not plan for more than two thirds of your available credit on your next loan. Otherwise you run the risk of paying your installment loan with the MRP in “bad” months – that means double interest charges. So first answer the question quite honestly: How much credit can I afford? – and then request the appropriate loan offer.
According to the two-thirds rule, you get less money from the bank than you could. But they gain a much higher level of security . Because you know that one or the other unplanned issue does not throw your financial plans over the pile. After all, you always have 100 euros, 200 euros or more out of your monthly surplus as a reserve in the hindquarters.
What happens if you ignore the two-thirds rule and exhaust the maximum credit maximum? You run the risk of losing your account balance even at the lowest unscheduled load. Admittedly, the credit line “catches up” so that the credit installments can also be debited. But always realize what that means: in this case, you pay high discretionary interest to service the installments for your loan, which in turn costs interest. This double interest charge would make your loan extremely expensive and should therefore be avoided at all costs.
Credit Tip 3: Use special repayments
The faster you repay your loan, the more money you save on interest. Special repayments are therefore often a sensible way to get rid of your loan faster. So, if you suddenly have more money in your bank account than you thought (because, for example, you’re doing a good deal, getting a bonus, or getting cash), then you can redeem part of your loan early.
As a result, the residual debt is reduced immediately and the total interest cost of your loan decreases accordingly. But beware: Check beforehand if special repayments are possible for free . Ensuring that you take out your credit via a credit-card guarantee. Unfortunately, many other providers have fees for early repayments. These fees are in principle prepayment penalties, with which the bank can pay off part of the lost interest income. This is a bad business for you as a borrower, which is why credit professionals advise you to think about “exit” when signing a loan agreement. Keep all options open and make sure that the possibility of free special repayments is explicitly mentioned in the contract.