Monthly installments - meaning and composition

A loan is essentially nothing more or less than borrowed money from a private person or a commercial institution. The terms borrower (also debtor) and lender are used for the debtor's and creditor's sides. Whoever lends you money will usually not do so free of charge, but will charge interest. Interest is the fee charged for lending the amount. In the case of a classic installment loan, the interest incurred is paid monthly together with the repayment portion (principal repayment).

This creates a monthly installment that consists of repayment and interest and must be paid regularly over several months to years. Occasionally there are special offers that provide interest-free repayment of a loan for an initial period. However, interest—and thus the actual fee for borrowing the money—should be considered over the entire term. The cheapest monthly installment is not always the best offer available on the loan market.

Details on repayment (for example special repayments) or other fees and the degree of flexibility over the term are things you, as a borrower, should pay attention to in the contract. Be sure to note how tightly you are bound to an offer and whether and when certain fees for your loan may apply.

Especially when adjusting the amount of the monthly installment up or down, costs can occur. Nevertheless, the monthly installment is the amount due each month and it should fit your life circumstances and not be chosen too high from the start.

Monthly installments must be individually adjusted

If you decide on financing or a loan, a monthly installment for repayment will always result. The amount of the monthly installment should be chosen with care. It must never be higher than the income you have available. Ideally, the rate should be so low that it hardly makes a difference. But this has the disadvantage that with low installments the repayment portion is correspondingly small and the term is therefore extended.

That is not always a disadvantage. Someone who is young and wants a little more flexibility will not make a mistake by choosing a low monthly installment. As long as repayment still takes place and the amount can be paid monthly without problems, there is nothing against a rate of your choosing. In most offers, however, interest rates are usually higher when you choose a longer term.

It is important that the installments fit the borrower's personal financial circumstances. Life without major restrictions should still be possible, because special expenses will generally never cease to appear in your life. You should still be able to build up reserves for emergencies of all kinds. Ideally, an installment loan is flexible enough that you can comfortably adjust a monthly installment. This way you can adapt the rate to your current life situation if that step becomes necessary in the future. The risk is lower if you opt for a rather long term and thus lower monthly installments.

Monthly installments for loans from MAXDA

To find the right loan for you, we are also interested in which monthly installment suits you. For example, annuity loans are often chosen for mortgage financing. In an annuity loan the monthly payment is also called the annuity. During the fixed-interest period the amount of the annuity remains the same. This means that if interest rates decrease, more money can be used for the repayment of the mortgage. For this type of loan and many other loans you can also find online loan calculators that help you determine the appropriate installment.

You are welcome to fill out an initial non-binding loan application. We grant general-purpose loans between 1,500 and 250,000 euros. With us you benefit from a standard interest rate of at least 3.99%. This rate is independent of the term. This also means that you can ideally choose a longer term and thereby reduce the monthly installment. In this way you enjoy greater flexibility throughout the year without having to accept an increased interest rate.

We are happy to help you determine the appropriate monthly installment and provide competent and straightforward advice. You do not have to wait long for approval of your loan with us. We want to assist you quickly. Therefore, loan approval with us takes only a few days. After you have completed the non-binding and free loan application, please send it to us printed and signed. Please attach a current payslip. If you have provided your e-mail address and telephone number, we will be happy to contact you and make you a suitable offer.

Repayment of your loan begins approximately 4 weeks after disbursement of the amount. That is when the first monthly installment is due. But you do not have to fear that you must strictly adhere to the specified term. If you wish, you can make an immediate full repayment at any time. This will repay all your outstanding liabilities at once and you can settle your financing with a single monthly installment. We offer competent advice, fair offers and the necessary freedom for changes in your life. We will find the appropriate monthly installment for you and thus the perfect loan model.