Particularly many people choose to take out a personal loan? at a certain moment in their lives.
Such a loan offers the perfect way out in different situations. It can not only be a temporary lack of financial resources, but also a large purchase that forces itself for which you do not immediately have the required amount available? A personal loan is a financially interesting form of credit that is characterized by linear characteristics and which can also be closed in a relatively simple manner. Nevertheless, the maintenance of a safe margin is always required. What we mean by this and how you can do that for each other you can read in this blog article.
How much money to borrow with a personal loan?
The linear aspect of a personal loan ensures that in practice it often happens that people borrow much more than they really need. At first glance this may not seem so problematic, but it still brings several drawbacks. Think of, among other things:
- The fact that you will always have paid more costs at the end of the ride;
- The impact this can have on any other financing you want to conclude;
Because of the above, before you contact a lender you have to decide for yourself what amount you exactly need. You can of course add a small percentage of this as an extra reserve , but do not overdo it here. Always keep in mind that borrowing money always costs money, no matter how attractive the standard interest on your personal loan may look like in the first instance.
Why is a safe margin handling so important?
In earlier times it was often possible to choose to spend up to 100 percent (sometimes even more!) Of your monthly income on repaying loans. It goes without saying that this was doomed to go wrong. When it became clear that such credit openings did not really do anyone, it was decided to build in a certain safety margin. This margin was applied by both banks and alternative lenders. The strictness of the margin has not been determined, so that it is actually (within certain limits) fully determined by the financial institution in question.
In the basis above, the above already offers a certain guarantee for you as a potential borrower. That is nice, but often not enough. The banks or other financial institution where you have applied for your personal loan will only take into account the following factors:
- The existing debts and the associated periodic repayments;
- The lump sum that is used for the fixed costs.
The above two costs are of course very important, but there is more. Many people who are older, for example, choose to set aside a certain amount each month for their child (ren). In addition, many save for their own pension and there are any additional costs for, for example, booking a holiday. The bank or any other financial institution can never have a 100% accurate picture of all periodic costs that you have to pay. Making such a detailed calculation yourself is therefore always very important.
What to take into account when calculating your financial margin?
The above already indicates a bit, only taking into account your existing debts is not enough to calculate your margin when taking out a personal loan. Other factors that you have to keep still are:
- The savings strategy you use (periodic deposits on savings accounts as well as possible fixed long-term savings plans such as pension savings);
- The fixed costs for food and drinks (these are really different for everyone);
- The basic costs in the form of the house rental or the payment of a mortgage;
- The costs for utilities such as water, gas and electricity;
- Extra insurmountable costs that have to be incurred such as for petrol.
Do you take into account the above influences on your financial situation? Then you are still not actually there. In addition to these matters, it is advisable to build in a reserve of at least 10 per cent per month on your full wages. Does an unexpected situation arise at a certain moment that is accompanied by substantial costs?? Then this does not immediately have to compromise your solvency. That way, you can only conclude the personal loan you want with peace of mind.
What if your calculation does not turn out to be correct?
The personal loan is generally known as the most linear form of credit that can be found on the financial market. That has its advantages. Not only are you certain that your financial debt has been repaid at a certain moment, you can also enjoy a very attractive interest rate. Yet there is also a danger in the personal loan. Did you know that there is almost no way to deviate from it? Do you choose the wrong payment terms and are you likely to get into trouble? Then this can affect your financial situation and possibilities in an extremely negative way. You will therefore always be confronted with (considerable) extra costs and it is also possible that any new financing can no longer be closed as easily.
Interesting tools to use
Calculating the margin that you have when you take out a personal loan may seem a bit complex at first sight. Yet it does not have to be that in practice. With the advent of the internet, a number of very interesting tools have appeared that give you a very concrete picture of your required payments without having to contact a lender. A well-known example of this is the execution of an online simulation. In just a few seconds you know exactly what you need to take into account in terms of monthly payments and how long you have to fit these into your financial situation. This way you can immediately determine in all precision which margin you need to handle for you and possibly also for your family.