While convenient in our daily lives or during a trip, credit cards can become very costly when used for making purchases on credit…
Varying Interest Amounts Depending on the Type of Credit Chosen
When you make a purchase using your credit card, a repayment option may be offered by the merchant you are dealing with.
This merchant is partnered with a company specialized in bank loans. This enticing financing option results in high-interest rates (often around 12.5% per year). To avoid paying exorbitant interest, you should repay your balance as soon as possible, which is usually not easy when you’ve just taken out credit….
TopCompare.be conducted a study analyzing the rates applied on various credit cards, as well as the prevailing rates for personal loans. The observed rate differences revealed that it is much more advantageous to opt for a personal loan, due to the lower interest rates offered compared to those on a credit purchase with your bank card. It is therefore advisable to take out a personal loan over 12 months, rather than repaying your credit card balance over 6 months.
A credit card purchase should only be considered if one can repay the contracted loan in less than 3 months.
If you cannot repay the borrowed amount within 3 months of taking the credit via your bank card, it is more prudent and wise to postpone your purchase…
How to Obtain a Loan of 4,000 €?
If you want to obtain the sum of 4,000 € without paying excessively high interest, calculate the total interest from using your credit cards and compare it to the interest on a personal loan.
- Option 1: Credit card with a limit of 5,000 €
If you decide to repay the borrowed capital over 3 months (in 3 installments), you will pay 79 € in interest. However, if you opt for a personal loan at Buy Way Finance over 3 months, you will pay 36 € in interest. - Option 2: 4,000 € payable in 6 months
If you decide to repay the borrowed capital in 6 months, you will pay 138 € in interest. On the other hand, if you choose a 6-month personal loan at Buy Way Finance, you will pay 63 € in interest. - Option 3: 4,000 € repayable in 12 months
If you choose to repay the borrowed capital over 12 months, you will pay 256 € in interest. If you opt for a personal loan at Buy Way Finance, you will pay 116 € in interest. - Option 4: 4,000 € repayable over 3 years
Want to repay your credit over 3 years? Note that from the 34th month, you will have reached the end of the zero-balance period. This means that if you do not repay the amounts due within 3 years, you will owe the total amounts required by your lender. You will, therefore, need to pay the due amount at once.
