Replace expensive disposition with a cheap installment loan
If the holiday is just around the corner, your wallet and account are often particularly heavily burdened. Be it for the holiday trip, patio furniture or new summer tires, many consumers resort to their disposition in such cases. However, due to the very high interest rates, this is usually the wrong choice. If the account is at low tide again, drawing on the overdraft facility is not a good idea. This is especially true if timely repayment is not possible. In most cases, the installment loan is the better solution for financing purchases or to compensate for financial bottlenecks. A variety of cheap loans can be found via the free loan comparison.
Overdraft facilities are usually significantly more expensive
Even if the account is empty, most consumers can still withdraw money easily. The banks are happy to grant their customers an overdraft facility because they earn enormous amounts from it. As the Astro finance recently found in a study, the interest on a credit facility can be up to 13 percent. This makes the overdraft facility one of the most expensive financial products. On the other hand, with a loan comparison, installment loans can be found from an interest rate of only 3 percent.
Another problem with overdraft facilities is that they are granted without a fixed term. Therefore, many consumers find it difficult to keep an eye on their finances. In this way, a short-term overdraft facility quickly becomes a permanent loan with ever higher costs. In the worst case, the account holder is headed for overindebtedness. The longer the account is in the debit, the more the total costs increase, since new interest is calculated every month.
In contrast, a fixed term and a constant monthly rate are agreed for the installment loan. The planned repayment will make it easier for the debtor to repay the loan as quickly as possible and to have a better overview of the financial scope. Therefore, the following applies: If the overdraft facility is not settled within a very short time, it should be rescheduled through an installment loan.