Don’t be surprised by the upcoming interest rate rise. It is worthwhile to prepare for any eventuality before the storm, and to reserve for the increase in installments. We’ve collected how it’s worth doing.
What can we do?
An increase of one percentage point in an average loan can lead to a 9 percent increase in installments, while a 3 percentage point increase the monthly burden of a family by a third.
Save for hard times. If you now feel that you can easily pay your monthly installments, then try to set it aside a little in the event that your bank interest rates increase. You can eventually spend your savings on prepayments, so even if your loan costs do not change significantly, a small reserve is useful.
Replace your old loan
In recent years, the transparency of loans has improved significantly, mainly due to the adoption of a law to this effect. New loans can now only be linked to benchmark yields or can be fixed for a long period of time, greatly reducing customer exposure to unilateral bank modifications.
It was part of the same law, and it was included in the law on credit institutions that, in the case of contracts concluded before April 2012, creditors have the opportunity to convert their debt into a suitable loan once during the term of their loan. Check with your bank!
Fix Your Credit
For old loans, especially those with early repayment debts, it may even be worthwhile to replace your entire loan with a better loan at another bank or within your own credit institution. Interest rates have also fallen dramatically in recent years, with more and more promotions at banks, and it’s worth looking at and calculating.
Among the offers you will find several loans with installments of 5 or up to 10 years. Choose these and be sure you are protected against interest rate fluctuations for a long time.