A long-term loan provides the necessary security to be able to react flexibly to changes in life. There are good reasons for long terms in loan agreements. A person’s life cannot always be safely planned over a long period of time. Only small installments ensure the necessary poster to accept financial setbacks. The loan can always be used safely. A planned long term does not automatically mean that you have to pay a loan for a particularly long time.
Good reasons for a long-term loan.
A secure repayment capability is the most important reason for a long-term loan. Especially with large amounts of financing, it is not advisable to pay off the loan as quickly as possible with all your might. People who choose their loan term based on the current maximum rate burden play with fire. Even those who are convinced to exercise self-discipline, to get by only with the bare essentials every month, should be warned against this. There are unpredictable events in every resume. Employment histories can hardly be compared to those of previous generations. Most people today experience the career decline and restart several times.
The long-term loan ensures low installments. A loss of income in the future can be compensated. The residual debt insurance provides only limited security. Sooner or later, most of them will have to get into lower paid jobs. The RSV will then no longer perform.
Debt-free again quickly despite long terms – how it works.
A loan with a long term and special repayment right ensures small installments. Nevertheless, it can be repaid at top speed, as far as the financial framework allows. Savings contracts are a good solution for faster repayment. The loan is concluded with a maximum term. The secure solvency is worth the slightly higher interest rate. This creates the freedom for a savings contract. The loan is “saved” every month. If you have a larger sum, then the special repayment can be used. Even unused parts of the Christmas bonus can be easily brought into the repayment. However, the low rates continue. If something goes wrong in life, you don’t save for a while. The loss of income is somewhat compensated for by the suspension of the savings contract. The long-term loan can still be serviced safely thanks to the low rate.
Civil servants in particular can benefit from the long-term loan. Official loans are offered with significantly longer terms than loans for people working in the private sector. The possible term is also mostly linked to the intended use and the loan amount. Especially with real estate financing, long-term loans are the rule.