Do you need a loan? 3 tips to save when applying for financing

Last October, the average interest rate for consumer loans was 6.48%, according to the Bank of Spain. Taking this figure as a starting point will help us assess whether the loan offered by a bank is expensive or cheap. But we should not focus solely on interest, since there are other aspects that, although they may go unnoticed, they also influence the final cost of financing. In fact, it can be the case that an interest-free loan is more expensive than one that does have them, say sources from the financial product comparator HelpMyCash.com. Here are three tips for save when taking out a loan.

1. Beware of commissions

Commissions can make a loan considerably more expensive. For example, if we request a loan of 10,000 euros with an opening commission of 3%, we will have to pay 300 euros at the beginning. Although not all credits include this expense, it is common to find it in low interest-free loans, since it is more profitable for the bank to apply this commission than to charge an annual fee. Thus, for example, a loan of 1,000 euros for six months with an interest rate of 6.48% would generate 19 euros in interest, while the same credit at 0%, but with a commission of 3% would cost 30 euros .

Another commission that can make credit more expensive is the one charged by the bank each time capital is advanced. Making partial early repayments allows you to save interest, especially if the term is reduced, but savings will be diminished if every time we advance capital they charge us a commission. In any case, by law, the commission for early repayment cannot exceed 1% of the anticipated capital if the remaining term until maturity of the loan exceeds one year or 0.5% if it is less.

2. Monitor the cost of linked products

Most banks discount the interest on their loans if the client directly debits their payroll or hires other products such as a pension plan, a credit card or insurance. These associated services may have a cost, as well as the account that the bank requires to open to direct the loan payments. It is important check the cost of these services and assess whether it pays to pay for them in exchange for a reduction on the interest rate.

Some financial companies offer credits with attractive interest rates without having to contract other products, explain the analysts of HelpMyCash. There are even companies that allow you to hire personal loans without changing banks, that is, the client can direct the monthly payments to the account he wants, so he makes sure that he will not have to pay commissions for this concept.

This is the case, for example, of Cofidis. his Project Credit from 4.95% NIR (5.10% APR), with which you can request up to 15,000 euros without commissions, does not require the holder to contract other products or to open a new checking account. They also allow you to request financing without changing your BBVA or Cetelem bank.

3. Do not extend the term excessively

The interest rate plays an important role in the final cost of the credit and, especially, in the amount of the monthly payments, but also the duration of the loan greatly influences. A long term will allow you to pay a reduced fee, but it will make the product more expensive, since interest will be generated for a longer time. A short term, on the other hand, will increase the amount of the fees, but will reduce the final cost.

If we request, for example, 6,000 euros at 6.48% TIN and we return them in three years, we will pay 184 euros each month and the final cost will be 618 euros. If we return them in twice the number of years, the monthly payment will be reduced to 101 euros, but the total interest will reach 1,258 euros.

The key, say the experts of the HelpMyCash comparator, is find a balance and choose a term that allows you to pay an affordable fee while repaying the credit as soon as possible.

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