On October 23, 2019 by Kenneth Cobb

A loan can solve many problems, but remember to also solve the loan . Solving the loan early is the fact an effective way to get more money in your wallet. Here we take a closer look at the advantages – and in some cases the disadvantages – of solving expensive loans .

What does it mean to solve expensive loans and credits ?

With a loan always comes a installment plan. Often you have several years to pay off the debt, which is obviously convenient. But even if the installments do not seem to affect your finances too much, the loan becomes more expensive than if the repayment period was shorter, since you may be deducted with interest costs for a longer period. If you have a very high interest rate on your loan, it may be a good idea to try to settle it early – thus repay the debt – because you are earning it both in the short and long term.

Are there drawbacks to solving loans and credits ?

If you have borrowed a large sum of money you will need a buffer to be able to redeem the loan without compromising your everyday finances. Ruining yourself just to settle expensive loans early is not a good strategy. But even if you can’t pay off the entire debt on a board, you make a lot of money in solving part of the loan in installments. Each time you pay off a larger amount than you have to according to the loan terms, you also lower the interest rates on the remaining part of the loan. Because lowered interest rates mean you get more into your wallet, you can also pay off more on the loan for each month that goes by.

What loans do I earn the most from settling?

Quick loans and credit card debts usually have a very high interest rate, as well as fees and hidden costs. If you have several small loans, the total loan cost with interest will be higher than if you only had a private loan at a higher amount to pay off. If you have money left over, you always make the effort to solve the expensive fast loans as soon as possible.

Private loans, or loan loans, are often slightly larger than fast loans and place more stringent requirements on you as a borrower. The advantage is that you get better terms on these loans and therefore do not have to settle them as quickly as smaller and more expensive loans.

Am I no longer making money from investing?

Investing the money in mutual funds or equities instead of settling on expensive loans is an option, but you have to figure out what you think you will earn the most from in the end. One thing is certain, though – you always earn from repaying your loans, while investing always involves a risk. If the interest rate on your loans is noticeably affecting your finances month by month, you are wise to try to get debt free as quickly as possible before putting your potential savings at risk.

If you have many expensive small loans, you can try to collect them into a single larger loan that can give you better interest rates – either directly when you collect it, or at a later time when you renegotiate your aggregate loan (then with better credit rating).

When you make a loan application through Leopold Bloom, you let over 38 banks and lenders compete for you as a customer – the optimal way to get a favorable interest rate on your aggregate loans. In addition, only one credit report is taken, which does not affect your credit rating to the same extent as if each bank does its own checking.