Almost every adult in Finland has faced a situation where it has been necessary to borrow. But how do you choose the most suitable loan for you? How do you decide what kind of loan to take?
Loan to many – Identify your needs
The loan amount could have been saved in an acute situation such as a washing machine breakdown. Every mother or father in the family knows that without a washing machine, the economy will not last long.
Credit can also be a security when traveling. It can be a reserve fund for situations that require a little more money than budgeted.
It can be a one-off loan earmarked, for example, for renovation or car purchase. In these cases, the loan amount is often slightly higher than a few thousand euros.
A larger loan can also combine small loans that have been accumulated by several financial institutions. This can save costs and at least make it easier to remember the due date of one invoice than many of those coming from different sources.
A loan can also be a precaution for all of these. It can be small money withdrawals from time to time, supplementing your savings or budget so that your entire month’s revenue does not dwindle to one purpose.
Simply put: what kind of need, kind of loan
Of course the decisive factor when choosing a loan is the amount of the loan, ie how much loan is needed. Also important is the purpose of the loan, whether it is for a particular purchase or whether the need is more flexible and repetitive.
The loan amount is 100 – 1000 €. **** For small loan amounts, there is a flexible loan that can be raised in small increments from time to time. A loan of a few hundred euros will help, for example, when it comes to repairing a home appliance, paying for a doctor’s visit, or even getting recreational equipment for children.
Loan amount 1000 – 2000 €. Relatively small loan amounts are still talked about, so flexible loans can handle these purchases as well. For example, small home remodeling or car down payment can be done with these loan amounts.
Loans from 2000 euros upwards. When it comes to loans of several thousand euros, this is usually a one-off loan. A one-time transfer can easily finance big investments, such as major renovations, buying a car or traveling with your whole family abroad.
If you want to be prepared for a loan in case of any unexpected situation, you should prefer a flexible loan that can be adjusted as needed. One big lump sum will pay its borrower, even if it has no clear purpose at that moment.
What a good loan is – take these at least into consideration
A good loan is customer friendly and flexible. This means that it can be paid in installments or in full, if necessary, and that the customer can decide how he or she wants to make the payment, depending on his or her financial situation.
The terms must also be easy to understand and clear. If you are not sure what you will get when applying for a loan, you may still need to think before you complete your application or apply for a loan.
The costs must be reasonable in relation to the loan. Excessive monthly or annual payments easily raise the cost of a loan without realizing it. Always check the annual percentage rate of charge and the charges included therein.