There are many types of loans you can choose to take as a borrower. Therefore, it is important to know all your options before deciding which loan to take. In this context, it is important to start from the perspective of your own personal finances.
In this blog post, we will first of all give you the answer to “what is a standing loan?” And at the same time discuss the various advantages and disadvantages of a standing loan. In addition, you will also have the opportunity to read a little about some other popular loan types so that you can quickly get an overview of the loan differences.
Mortgages – your benefits
There are special benefits to all types of loans, so it is important to know the benefits of a standing loan before making your final decision.
You can advantageously take out a standing loan if you do not want to pay off the loan itself. A standing loan can also be called a fixed loan because you first have to repay the loan principal on the last installment. This means that you have to repay the entire loan at one time when the loan period is about to expire. In return, you will pay a fixed amount for the loan interest at each installment – throughout the loan period.
It is important to assess whether you are able to repay the entire principal by the last installment before choosing to take out a standing loan. If you continuously find that your finances are not for it, you can create a new loan to pay off the old one. However, it may not be a particularly optimal solution, even if it is possible for you.
So the great advantage of a standing loan is that you get the money now and here – without even having to pay much over the entire loan period. Typically, these loans are a quick repayment because the loan type does not fall below the 48-hour period of reflection. In addition, the shorter term of the loan type means that you can typically get a lower interest rate on the loan and at the same time can save money so that you can pay off the loan at the last installment.
Mortgages – your disadvantages
It is always important to look at the disadvantages of the different loan types before you apply. When it comes to a standing loan, you have to pay a fixed monthly payment, which is the interest of the loan. In addition, it is typically very tempting to take out a new loan to pay off the old one, which you should be aware of. It can be a costly pleasure for you if you simply take out a loan on another.
That is why we always advise against taking out a new loan to repay your old loan – or other existing debt.
Other popular loan types
There are also other popular loan types that are worth knowing about. Among other things, you will find an annuity loan and a serial loan.
An annuity loan is characterized by equal benefits – ie. installments and interest – falling at each term. It automatically gives you financial stability and security because you know what exactly to pay. It also makes it easier for you to set a budget that you have the opportunity to follow and comply with.
The interest on your annuity loan will be based on your outstanding debt. Therefore, the interest on your loan will be higher at the beginning of the loan period and lower at the end. On the other hand, the installment will increase, so that the benefit will remain fixed over the entire period.
Therefore, the type of loan is typically an advantage for those who do not have unlimited amounts of money and who need to set a budget so that expenses and income can be kept under control.
A series loan, on the other hand, will consist of a fixed repayment and a constant falling interest rate. It automatically creates a profit in your finances because over time you will pay less and less in interest. It also means that you will typically be able to pay off more on your principal so that you can become debt free faster. In addition, the installment will not vary month by month, which typically acts as a security.
Good Finance – your safe choice
At Good Finance we offer you annuity loans with immediate payment. This means that you do not have to wait long before you have the money in your account – we will pay you right away. In addition, our annuity loans automatically guarantee you a large overview of the entire loan period, which is to your own advantage.
In our front-end loan calculator, you decide for yourself what your monthly payment should be on your loan. That way you will automatically have the opportunity to customize your loan to your own personal finances so that it all ties together for you. We always focus on you.
At Good Finance you will not be able to take out a loan if you are either registered in GFI or in the Debtor Register.