There are fanatic savers. At the beginning of this year we had a savings bank of almost 344 billion dollars together. A substantial amount! Especially when you consider that the interest on savings is very low.
More striking is that one in six savers has a loan. While a loan costs more than saves money.
Ever-lower interest-rate savings
That the interest you get for your savings is low is no news anymore. The bank has continued to lower interest rates. This has made borrowing money cheap for banks. They therefore need consumers’ savings less and they are therefore less willing to pay for this. At most large banks, the interest on savings is now also below 1%.
There is another thing that makes saving unattractive: the capital contribution levy. Did you save more than 21,330 dollars? Then you pay tax on the return that you achieve on the amount that you have more.
But with the Tax Authorities they still assume a return of 4%. While most people simply have the money in a savings account and therefore earn less than 1% in interest. This will change in 2017, but at the moment you are still expensive with a full savings account.
Repay loan with savings
Of course: a little interest is always better than no interest. But if you have a loan at the same time, paying off your loan is wise. The interest that you earn with your savings does not outweigh the interest that you pay for your loan. Then you can better use your savings for paying off your debt.
Responsible lending and repaying a loan
Please note: a continuous loan can always be repaid without penalty. But paying off a personal loan can incur additional costs.
Also, do not immediately clear your entire savings account before paying off your loan. Always keep an amount in mind for emergencies. So that you do not have to take out a loan immediately if, for example, your car fails.
Request a loan repayment request
In addition to advising on loan applications, my colleagues and I are also happy to help you repay your loan. For example, do you have multiple loans? Then it can be interesting to look at the merging of your loans in addition to the repayment. Knowing more? Request a free quote now and discover your options.