Is Low Installment Always Profitable?
Do you want to take out a loan and wonder how the arata will be the most beneficial for you? In this case, it is worth remembering a few things to make repayment easy, quick and safe. More exposition at barsugliafarms.com
Most borrowers decide to use installment loans. Thanks to them, we can borrow a larger sum for various expenses and then pay it in monthly installments. In this way even a larger sum is possible to give.
Today, most banks and loan companies allow their clients to choose the installment amount themselves. We determine it by changing the debt repayment period. The longer the installment loan, the lower will be our monthly installment. Therefore, with a shorter repayment date, the loan will be higher. What is the better solution?
Adjust the amount of installment to yourself
The most important thing is to match the amount of the installment to our household budget. The installment should then be easy to pay off and leave us a sum of money within a month for these unforeseen expenses. Therefore, we should not choose the amount of the installment that will allow us to spend our money “on contact”. Then there is a good chance that we will just run out of funds.
For example, if we earn PLN 2,000 net and we spend PLN 1,000 net on permanent expenses, and the rest is left for food and other costs, the installment amount should not be higher than about PLN 200 per month.
Banks and non-bank institutions ask their clients to enter in the loan application data on monthly income, as well as expenditure, and also about the number of people in the household. On the basis of these data, they also determine independently which installment would be the most advantageous for the client and not increase the risk of non-payment of the liability.
Low installment – its advantages and disadvantages
When we want to pay the lowest installment, let’s just extend the repayment period so that its amount is right for us. On the websites of many banks and loan companies, we can find special loan calculators that allow us to calculate the amount of the installment at a specific loan amount and repayment period.
Therefore, a low installment is definitely a good choice, because we do not have to risk losing money. However, we must also remember that low installments also have their downsides. Above all, the main one is the greater cost of the entire loan. We can find out about it using the calculators mentioned above. The installment loan has a longer repayment period, the more expensive it will be – the difference can amount to several thousand zlotys at higher sums.
In addition, the low installment also means greater uncertainty. We never know what will happen in a few years, when the loan is to be repaid for so long. Will we still have a job then? Will not something happen that will cause problems in repayment of debt? Therefore, with a longer repayment period, we also risk more because we do not know if the current installment amount, which is easy to repay, will also be problem-free in the long run.