According to Credit Agency, Britains are reliable debtors: over 97 percent of the loans for bad credit no guarantor direct lender taken out are repaid without any problems. If a debtor does get into financial difficulties, this is often due to an incorrectly chosen term. In this article we will explain how to calculate the optimal rate for your instalment loan and your individual situation.

With a loan, you rent money over a longer period of time. To ensure that you can also afford this rent, you determine the monthly instalments with Credit company yourself. By determining the term, you adapt the monthly costs to your individual financial situation.

With Credit company installment loans, you can choose between 12 and 84 months’ terms. The debit interest rate is fixed with Credit company and therefore offers you a high degree of planning security.

Basically the following applies:

  • Short term + high monthly rates = lower total costs
  • Long term + lower monthly rates = higher total costs

Determine the optimal monthly rate

A quick repayment with lower interest rates seems tempting. But consider whether the higher monthly instalments also fit into your monthly budget. It is essential that you draw up your own cost plan beforehand, which covers all monthly expenses and income.

The good old budget book, which should be kept for several months, provides a better overview. Online budget books and apps make it easier to enter the data. You may find expenses that you can save.

Our tip: Be sure to plan a monthly financial buffer: You may be able to do without a visit to the cinema or a shopping spree. On the other hand, an unplanned car repair or a dentist bill must be paid.

Example of a cost plan to determine the monthly available amount

Sandra would like to use a loan to make a longer language trip possible. She needs 2,000 GBP for six weeks in Florence. She has about 1,600 GBP per month at her disposal for her living expenses.

She calculates her regular total expenditure:

Rent: 650 GBP

telephone/internet/mobile phone: 45 GBP

Food: 350 GBP

Public transport: 85 GBP

Private insurance: 25 GBP

Clothing and personal hygiene: 100 GBP

Free time: 100 GBP

That leaves about 250 GBP.

Sandra is cautious and wants to plan a generous financial buffer for unexpected expenses. That’s why she decides to plan a maximum of 90 GBP per month for a loan.

With the loan calculator for the optimal term

What remains after deducting all these costs is the highest loan rate you can afford. With the Credit company credit calculator you can calculate the appropriate term. Is personal advice important to you? No problem: you can get comprehensive advice free of charge in over 10,000 partner branches in your area.