If you have not paid off your bank debt ahead of schedule, you may be making one of five common mistakes. We will tell you about each of them in detail.
Choosing the wrong loan
When you have several loans, it is tempting to pay off the smallest one first. But this is not always beneficial. To choose which loan to pay back, you need to consider the following factors:
interest rates;
loan term;
composition of the payment.
It is more profitable to close loans with the highest interest rate - this find your mobile number database method will significantly reduce costs. But sometimes it is better to pay off a product for which you will have to pay longer, because overpayments are made up of the rate and term. Calculate how much you will save in each case, and only then make a choice.
The most important parameter is the composition of the payment. If you took out a loan for 5 years and you have only one year left to pay, the largest part of the payment is the principal debt. The savings from early payment of this amount are small. At the beginning of the term, the payment, on the contrary, consists almost entirely of the interest part. It is much more profitable to partially close a new loan than to fully repay the old one.
Forget about insurance
If you took out insurance along with a loan (for example, life and health insurance or unemployment insurance), you paid the cost of the policy for the entire loan term. Many contracts with insurers allow you to get back part of the insurance premium.
Review your insurance contract. If it provides for a refund, send a statement to the insurer. If not, keep this mistake in mind for the future. You can work with any insurance company, not just those offered by the bank. Choose the company that offers the most favorable conditions. Discuss the possibility of a refund in advance with early repayment of the loan.
Deposit a smaller amount
Borrowers who do not fully understand the intricacies of lending can act according to the following scheme:
Find out the amount of debt before submitting an application to the bank. This can be done in the mobile application or by direct request to the creditor.