What does maturity mean?
“ In addition to the maturity telling when you have finished paying off the loan, it also has an impact on how much you end up having to pay back.
When you need to borrow money, it is important to keep track of the meaning of the term term. When it comes to loans, maturity means the time it takes to repay your loan.
That is, how many months or years go by before you finish paying off your loan. The maturity can also be called the repayment period, which covers the same.
Besides that the maturity tells you when you have finished paying off the loan, it also has an influence on how much you end up having to pay back. You pay interest every month. So the more months, the more interest is to be paid back.
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How to determine the maturity
It can be hard to know how to choose the right maturity of your loan and what to consider before you decide.
If you choose a longer term, the monthly benefit will initially be lower. It can therefore seem like the best solution, as your monthly expense for the loan is lower. However, you must be aware that for a longer term, you also have to pay interest for several months.
If, on the other hand, you choose a shorter maturity, you pay off the loan faster and, consequently, you also pay interest for fewer months. However, you have to remember that even if it is nice to be debt-free quickly, your finances must be able to keep up with the higher monthly benefits that you will receive with a lower maturity.
Make an overview of your finances
It is important that you make a summary of your income and all of your expenses so that you know your monthly allowance. Once you know how much you have each month, you can better figure out how much you can pay each month.
At Good Finance we have built a loan calculator where you choose the amount you want to borrow. Then you can turn up and down the maturity and get an indication of the expected monthly service.
Try our loan calculator for free here
However, it is important to be aware that the amount is merely an indication. Your final monthly repayment depends on the credit rating the banks make of you when you apply for a loan.
Also read What is a credit rating
Good Finance gives you the necessary overview
Whether you need help checking the interest rate on your loan, or want to find a low interest rate loan. Then Good Finance helps you.
We are an independent platform that fights for transparency in the Danish loan market. We believe that everyone has the right to full transparency in a complex loan market.
We collect and compare personal loan offers from several reputable banks. Simply fill out a single loan application, and we will help you get the necessary overview. Then you choose the best loan offer with peace of mind.
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