Almost 10 years ago, I got the first of my only 2 loans: a new computer I’d pay for in 3 years (fixed rates, the laptop was purchased from a local store). Loan comparison? What’s this?
Back then my need for a new computer was indeed huge, since the one I was using couldn’t put up with how much work I had to do as a passionate new web designer. Instead of making progress and learning better, I had to deal with constant system crashes and resets, which didn’t help with my productivity and drove me crazy. That’s all I had in mind: I needed a proper computer and didn’t have the money for it.
Of course, as you can guess, my ‘shopping’ for a proper loan was pretty simple: went to the store, saw a good laptop and the payment plans. Said yes, signed the dotted line and that was it. Although reckless, I was lucky since the loan itself was a pretty good one.
The only downside was that I couldn’t pay it in advance (after 6 months I had the money to pay off my debt entirely, since my new web design business was really doing well). OK, I could pay in advance (no bank will refuse your money), but I’d also have to pay a hefty commission, so I decided to pay each month as the initial plan was laid.
Armed with such a great experience and the thinking that my side business can only go better (while also having a good salary at my main job), I decided to take another loan, a ‘breeze‘: almost 10 times bigger.
Having the opportunity to work with a web site like lanemegleren.no would have been great, but back then in my country there was nothing like this. And I didn’t want to wait or think about a better loan, I wanted the car.
Let’s see how I purchased my car, it’s a great example of how NOT to ‘shop’ for a car or a loan.
In the months before taking the loan I started saving some money, since I knew there would be at least a 20% down payment for the car loan, not to mention my (now) husband was still trying to convince me to get a second-hand car, which would have been less costly.
But I had my eyes on a new Vauxhall (Opel in Europe) Corsa. It was my favourite car and I absolutely fell in love with it. I wanted a Corsa, a red or ‘beije’ one (so that my logo would look good on it), also wanted to have alloy rims and a good sound system.
I spent more time looking at the extras than trying to get a better loan option.
Purchasing the car with the dealer’s loan system meant I also had to pay an expensive premium insurance for the vehicle and my loan conditions were pretty strict too. Just doing a little ‘leg work’ and doing my own loan comparison job would have saved me at least 3000 Euro. But I was stubborn and didn’t care. So I paid at least 25% more than I’d have paid with a better plan.
If I knew back then what I know now … in the past years I became more interested in better handling my money and got shocked thinking about such a financial mistake. But there’s nothing I can do to change the past, the good thing is that I was able to pay off my debt (even if pretty painful) and now my financial decisions are better.
Did you ever work with a loan comparison tool? Did you take a loan and not ‘shop’ around, only to find out you’re paying way more than you could have?