An installment loan, a personal loan, a cash reserve, etc. It is not always easy to choose from the wide range of consumer loans.
Choosing the right credit for your project
Before applying for a loan, it is always important to find an answer to the following questions. In this way, you ensure that you make the right choice and thus obtain the best interest rate.
Is there a specific loan for the good or service I want to finance?
Always first find out if there is a specific loan for your project.
This type of loan comes with a number of benefits:
- an interest rate that is lower than the one that you would obtain with other loans
- You can also borrow money for a movable (and not just real estate) property or service
The reason that the interest rate is lower with this type of loan is that the bank takes less risk. The purchased good can be sold, certain services (such as renovation works) cause the value of another good (for example a house) to rise, etc. The bank or credit institution therefore has guarantees in order to recover their money.
The borrower himself also enjoys greater security. Since the loan is linked to a specific good or specific service, the loan will not be granted if the sale of the good (or service) is canceled.
A few concrete examples:
- if you want to finance a used car, a new or ecological car, the car loan is the ideal solution,
- for a new or second-hand motor, the motor loan exists,
- You can apply for a car loan to finance a motorhome or a van. Some credit institutions even have specific loans for this type of vehicle,
- do you want to carry out work in your home? The credit institutions offer renovation loans and renovation loans in order to realize these. If the works aim to save energy, you can often enjoy more advantageous conditions.
If there is no specific loan, you can opt for a personal loan or a cash reserve.
You do not have to account for both types of credit: you can borrow an amount and use it for any purpose.
Personal loan or money reserve? You are unsure between both options …
With a personal loan you can borrow a small or large amount. The interest rate and the term are fixed when the loan is taken out. The credit institutions use different names for the personal loan, but often this is actually one and the same product.
A few examples of situations where a personal loan can be interesting:
- A personal loan is useful for financing decoration works. For example, you can finance new furniture, a new kitchen, paint, new parquet, etc.
- to finance a marriage,
- to finance your dream vacation,
- to finance studies (for example, the registration fee, the rent of a room, the books, a computer, etc.)
- for the purchase of a television, computer, smartphone, jewelry, etc.
- in case of setback, for example for paying taxes or other unforeseen costs…
A money reserve works differently: with the money reserve, your reserve is replenished when you repay the money used. This is actually a credit opening where you have money available as long as the contract is running. The solutions offered are very flexible and you can decide how quickly you repay the money. You only pay interest when you use the money reserve. Sometimes you get a payment card with this type of loan, in other cases the money is immediately deposited in your bank account.
A few benefits of situations where a cash reserve can be helpful:
- to cope with unforeseen circumstances,
- if you temporarily need cash,
- when you want to gain money in a flexible way.