In the year twenty twenty, everyone all over the globe was just doing their best to survive.
Every day, news about the Coronavirus was changing. Sometimes rates were up, sometimes they were down. It was impossible to plan ahead more than a few days at a time.
We were all in survival mode. How would we get through this? What kind of world would be waiting for us on the other side?
In times of crisis, we have to focus on the things that we can control. When you didn’t know whether a trip to the grocery store could ultimately prove to be fatal, everything else seemed trivial in comparison.
But now, there’s a vaccine. It is widely available around the world. Many countries are opening back up to foreign travel. Many businesses are up and running and ready to serve.
Now that things are starting to return to normal, this can be a great opportunity to take a look at your life. You can examine elements that perhaps you haven’t looked into much in a while.
One of the things that you may have placed onto the backburner was your financial well-being.
If you were lucky enough to keep your job during the pandemic, it could be that things are very much the same for you in that respect.
That is, of course, except for a few things.
The first is inflation. According to this website, the rate has more than doubled since two thousand and nineteen. That means that even if you’re making the same amount of money, it doesn’t go quite as far. Perhaps you’ve noticed that when you’re grocery shopping or after you pay your bills.
If you’re looking at your bottom line and feeling distraught, there’s no need to worry.
In this article we’re going to be taking a look at reasons that right now may be the best time to refinance.
Historic Lows
Unless you’re an avid fan of finances, you may not be keeping a close eye on interest rates as they change day to day.
Right now, the interest rates in Norway are at levels lower than they were in two thousand and thirteen. This means that any loan that you have taken out in the past nine years – whether it be a consumer loan, a credit card, a car loan, or anything else – you would more than likely benefit from refinansiering, otherwise known as refinancing. Click the link: refinansiere.net to find out more.
You may be asking yourself, “Would a few percentage points really make much of a difference? Why should I go to all the trouble?”
If so, then congratulations are in order. That’s because you’re one of a select few worldwide who recognizes the value of invisible labor, a term that refers to all of the work that goes into living that is unpaid.
Evaluating your financial situation, by the way, falls under this category.
So if you’re questioning whether it would be worth it, keep in mind that a lower interest rate means that you would be charged less for the same amount of debt. In a nutshell, you would owe less money to the bank just because you chose to refinance when the time was right.
It’s almost like getting a raise, when you think about it. Not such a bad deal, am I right?
Lifestyle Changes
The next thing to consider is whether you have undergone any lifestyle changes since you first took out your loans.
Odds are good that you haven’t stagnated in the same place you were then.
Banks take many different factors into account when deciding on the terms for your loan. Each bank has its own way of calculating. For example, one might place a lot of weight on your age. If you applied when you were twenty, you might have been given a higher interest rate just because you hadn’t reached the golden age of thirty, when people really start to know themselves.
Yes, just growing older can be a reason a bank might offer you a better deal on a loan. Even if nothing else has changed, you almost certainly have gotten older since two thousand and thirteen.
A Second Chance
Refinancing can offer you a second chance to get things done right.
Perhaps when you originally applied for a loan, you did it through your home bank. You may have been seduced by the convenience of doing everything in-house. Maybe your bank even sends you reminders or offers automatic payments so you don’t have to take time out of your schedule to make your payments each month.
No matter what the reason, if you only applied to one bank when you established your line of credit, now is the time to make things right.
As stated earlier, every bank has their own way of evaluating each individual client. If you didn’t shop around then, you may have missed out.
Now you have the opportunity to try again. This time, make sure to send out your information to many banks. The application is generally free. There’s nothing stopping you from applying to five, ten, or even fifteen different institutions in order to find the one that is able to give you the best possible deal.
Sure, it might take a little time up front, but the money you will save will make it all worth it.
Some people prefer to work with a loan officer in order to help them sort through all of the offers. Since many offer this service free of charge, it may be something you want to consider. Remember that invisible labor? No reason why you can’t share the load.
Convenience
If you’re reading this article, then you probably have internet access. And if you have internet access, then you have everything you need to complete the entire refinancing process.
No longer do you have to visit a bank in person in order to complete a loan application. In fact, many banks allow you to conduct all of your business over the internet. That means that everything can be done from the comfort of your own home or your favorite coffee shop.
It also means that you can really go wild with your applications. Since you need not ever visit the physical location, you are not limited by geography. Choose whichever bank is truly the right fit for you without hesitation.
Big Savings
We’ve saved the best reason for last.
Refinancing doesn’t mean just a few extra dollars in your pocket each month. No, it could make a real, substantial difference.
First, you’ll be saving money by consolidating everything into a single payment. Instead of making multiple payments each month, you will only be making one. That means only a single fee instead of several.
But that’s only the beginning.
There are a few types of loans that have high interest rates attached.
One of the most common is the interest on your credit card. Credit cards can have interest rates of up to thirty percent. That means that nearly a third of your balance is added on each month. That’s quite a lot, and it can add up fast. Click here for more information about credit cards.
Another loan with high interest rates is an unsecured, short term loan. This would be a loan for which you were unable to offer anything to the bank as collateral. If you decided to pay it back within a short span of time, for example, less than a year, then your interest rate could be as high as five hundred percent.
You read that right! You could be accruing up to five times your total debt each and every month. It’s easy to see how that could cause huge financial problems if you were not able to make your payment on time.
Let’s compare that with what you could be paying.
If you decide to take out a loan with a longer term, your interest rate could fall from five hundred percent to twenty percent. Already, you’re looking at a huge savings. If you are able to combine it with some of the elements we’ve already discussed, such as offering up your home or car as collateral, your interest rate could fall all the way to five percent.
That’s right. Although it is an extreme example, you could potentially go from paying five hundred percent interest to a measly five.
If that sounds a lot more manageable to you, it should.
If the idea of extending the term of your loan sounds loathsome – perhaps you’d rather just pay the thing off and be done with it, no matter the cost – keep in mind that many banks will allow you to pay off your loan ahead of time with no penalties.
Even though it seems backwards, applying for a long-term loan could help you pay off your loans much quicker.
Now that you’ve read through all the benefits, you’re ready to make an informed decision.
