Duration
Which duration and which monthly payments?
By choosing one loan duration, you choose the level of your monthly payments… and conversely.
Several elements are to be taken into account to choose its loan duration
The longer the loan duration is, the more you will pay interest.
One leaves, the rate is higher. The longer the duration is, the more important the risk of non-payment is for the bank and it is normal qu´ n the other hand it is remunerated with a higher rate.
But you must above all choose your d´emprunt duration according to your capacities of monthly refunding
By shortening the duration, you increase the amount of your monthly payments and your load of refunding. The monthly payments must correspond to your capacity of refunding and not to be too “crushing”. A too heavy load would be penalizing for you and it is in your interest to choose monthly payments appropriate to your incomes.
How to choose?
In fact, to choose one loan duration, it's to make a subtle proportioning: the duration must be sufficiently long so that the monthly payments are not “crushing” and does not have to be too long so that you do not pay too many financial expenses.
The best method is surely to initially determine the optimal level of your monthly payments: how much do you money can devote each month to refund your credit?
The rule in the banking world is that rising refundings n´excède not 33% of your incomes, ideal being not to exceed 30%. It's your capacity of refunding.
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