There are many possibilities for those who want to borrow money . Do you want to compare the interest rate of loans?
People sometimes ask us why the interest rates of different credits are so different from each other.
In this article we will go into more detail on two different and common forms of money: the personal loan and the mortgage mortgage.
Interest rate comparison: personal loan
In this text we will compare the interest rate of loans. The first current form of borrowing is the personal loan. This is also called the loan on payment and has a number of specific characteristics.
- With a personal loan you get money made available for a very wide purpose. There are personal loans for certain purchases, loans for a trip , urgent costs and expenses.
- The lender will only approve the file if he has sufficient security. The customer’s history, the income, he owns, blacklist, ..
- If the borrower remains in default, the bank does not have many guarantees. The money learned can already be spent entirely on consumer goods, a journey or other expenses.
- The lender therefore runs a higher risk that part of the money can not be recovered. If we compare the interest rate of loans, we see that the personal loan therefore has a higher interest rate than certain other types of credit. The bank guarantees are more limited. The risk and therefore the interest rate are higher.
Interest rate of mortgage loans
On the other side of the spectrum is the mortgage loan. With this loan, the bank or lender has a broad guarantee.
- A mortgage is taken on the property. This can be the house or apartment of the borrower himself. It is also possible that a third person gives his or her residence as a guarantee. We then think of family or the partner.
- When we compare the interest rate of loans, we see clearly that a residential loan has a low interest rate compared to an installment loan or personal loan.
- A mortgage loan for the purchase of a home has a much longer duration. Since the home serves as a guarantee, the lender takes less risk.
- The interest rate on mortgage loans for the purchase of real estate is therefore much lower.
Comparing the interest rate of loans?
If you are looking for an interesting loan, you will of course compare the interest rate of loans. As an Online Credit Broker we work together with multiple lenders. We have extensive experience with all forms of loans. Even those who already have several loans can contact us. Contact us and we discuss your file with you, discreetly and without obligation.