The bank’s aggressive advertising is back. From one moment to another it seems that everything is easy and that credit is within the reach of all. In this context, it is important to realize the potential of the new credits and to understand how it is possible to lower the monthly payments … but taking into account some risks. In this article we will seek to help demystify the dangers around credit.
Interest Rates Are More Credit Friendly
A few years ago interest rates on some loans were above 30%. Nowadays it is possible to have access to some credits with rates lower than 15%. A reduction to half in a short time, due to the reduction of interest rates of the European Central Bank. Why not see the evolution of EURIBOR interest rates?
If the interest rates are lower it becomes cheaper to have access to the money … therefore, it is possible to save money on the old credits as well as on the new credits. But how?
How to Save Money on Your Credit?
If you have a credit made a few years ago you can reduce your monthly payments. Here are some useful ideas:
- Mortgage lending – Banks are lowering spreads, a move similar to the fall in EURIBOR rates (as previously mentioned). In this way, you can negotiate with your bank a reduction in spread or, alternatively, transfer your housing credit to a bank that respects you the most.
- Personal Credit – You can ask for a personal loan to pay off another (or other credits). At LB Credit, we are very adept at consolidating credit, which is, in practice, to ask for a new loan to pay off several old loans. In this way, the benefit is reduced through the reduction of the interest rate and, possibly, the increase of the term (beware of the latter possibility).
- Credit Card – If you repair the fee applied to your credit card, if you did it several years ago, it should be higher than 30%. This is because banks are only forced to lower usury rates on new contracts … so old contracts keep the same start rate. Why not contact your bank and demand that the fee be reviewed ? Alternatively, order a new card and use the plafond to settle the old card.
And What are the Risks of These Strategies?
The strategies presented may have some risks and associated costs. Hence our successive warnings to carefully analyze costs, commissions and always take into account your family budget. The new installment will be lower due to the interest rate. However, it is necessary to realize whether the increase of the term will be harmful or not. Never forget that the longer it takes to pay the credit, the more interest you will pay …
Simulate Your Concrete Case
If you want to see how much you will be able to save each month with a new personal credit you should use the LB Credit personal credit simulator. Please note that the figures given are indicative, so you will be contacted to fine-tune the simulation with your specific reality. Do not forget, too, that LB Credit and its partners do not charge any analysis, evaluation or dossier costs!