From 1 April 2009, all credit providers are obliged to wear the “borrow money costs money” logo. The advertisements must also contain this image, exceptions have been made for mortgage-related advertisements.
You must have seen or heard about it, the warning that borrowing money costs money in images or speech. This has created the AFM to warn people that borrowing money actually costs money. Many people did not realize that the redemption could nevertheless contain several thousands of euros more than previously thought. The debt problem has risen considerably in recent years and in this way the AFM tries to make customers aware. 89% of consumers thought the plan was a good idea after research.
Risks of borrowing
1. Not sure if it is possible? Do not do it!
If you do not know whether you can borrow, do not do it. You must be able to take out the loan financially in order to be able to repay it in full. It is possible that various providers can still offer you a loan, but this can cause financial problems later on.
2. Do not borrow more than necessary
If you have money for a while, that is of course great, but don’t forget that you have to pay it back. Therefore, do not borrow more than you really need and thus prevent unpleasant surprises.
3. Request multiple quotes
Before you take out a loan, you must make several offers. It is important that you only borrow from recognized Dutch websites with the AFM quality mark. Find the cheapest offer and take out the loan there.
4. Do not purchase on installment
Buying on installment is often very expensive. You sometimes pay 15 to 20% interest here compared to, for example, 6 to 10% on a regular loan. Although it seems so nice that you can buy a TV for BUT “20 euros”, always read the print.
5. No new loans
Do not take out new loans before you have paid off the old ones. If you do this, you will continue to run into problems for yourself, if you really need a loan, please contact an experienced expert who can help you chart your financial situation.
Television and radio commercials influence the thoughts about taking out loans. Indeed, it is suggested that it is very easy to borrow and it is increasingly easier for consumers to think about taking out a loan in the event of a lack of money. However, is it wise to take out a loan and what are the points of attention when it is decided to take out a loan?
Influence by advertising
The perception of consumers about taking out loans is influenced by advertising, as mentioned at the beginning of the article. The statements on radio and television, where loans are promoted, make consumers believe that it is the most normal and simplest thing in the world to take out a loan. However, it is always advisable to consider the necessity of taking out a loan.
Points of attention
When taking out a loan, it is certainly advisable to take a number of points of attention into account, because of course, taking out a loan is not always as wonderful as it is presented in advertising.
The fine print and conditions
When seeing an advertisement on television about loans and credits, it is advisable to look directly at the small print at the bottom of the screen. This is because there is information, and the stated conditions of the loan are often immediately invalidated. When seeing a commercial about a loan, it is therefore wise to also pay attention to the fine print that forms part of the conditions.
In the advertisement or advertising of loans, the product is of course offered as a fantastic loan, but of course only positive information is provided. It is therefore advisable to take a look at the website of the credit provider to see what information there is given about taking out a loan, where the conditions can be read.
Compare providers with each other
As soon as there is sufficient knowledge about the various loan forms and a choice has been made, it will be possible to compare providers in the field of credit. The easiest way is to do the comparison online, so that multiple providers can be compared in a short time. You can enter data such as the amount you want to borrow and see what the current interest rate is for the loan in question. By carrying out this promotion at different providers, a comparison can easily be made. Requesting a free quote naturally offers a better insight into the differences.
Advice on borrowing
The knowledge about loans and credits may not be sufficient to make a well-considered choice. It is therefore quite normal to first seek advice from an expert about taking out a loan. Personal advice can be requested via the internet, but there is of course always the possibility to visit a bank personally.
Borrow or not borrow?
It is always handy to have money in a savings account, so it is not necessary to borrow money. That is why it is always advised to see whether it is really necessary to take out a loan or whether, for example, money can be saved for it. By the way, an exception is made for taking out a mortgage, because that is common financing for buying a home. It is advisable to look for a cheap loan, where the costs are the lowest. Don’t just go for companies that promote their loans via radio and television, but always compare this with other credit providers.