Basics
Term and instalment: the right balance
The term determines two things at once: how much you pay each month and how much the loan costs in total. Minimising both at the same time is not possible.
The relationship
The longer the term, the lower the monthly instalment – and the more interest you pay overall, because the money stays borrowed for longer. A loan of €8,000 at 5.9% APR:
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Between 24 and 96 months, the interest cost quadruples. The instalment does not fall in the same proportion: from 72 to 96 months, it saves only €28 a month but costs around €520 more.
Finding an affordable instalment
The rule of thumb: the highest instalment you can reliably pay even in a bad month. Take your monthly net income minus fixed outgoings (rent, insurance, existing instalments, living costs) and leave a buffer for the unforeseen. What remains is the ceiling – not the target. An instalment that pushes right up to this ceiling is not a good instalment.
Banks calculate in a similar way: they check whether enough remains after all commitments. An unrealistically high instalment therefore does not lead to a better rate, but to rejection.
Overpayments
Many banks allow free overpayments: you repay an additional amount on top of the instalment when you have money to spare – from a tax refund or a bonus payment, for example. This lets you choose a longer term, keep the instalment low and still pay off the loan faster. Check whether overpayments are possible without a fee and up to what amount.
You have the right to repay the loan in full at any time in the EU anyway; the bank may charge a limited early repayment compensation for this – for consumer loans at most one percent of the amount repaid early, and at most half a percent if less than one year of the term remains.
Payment holidays and adjustments
Some offers include the option to skip one instalment per year or to adjust the instalment during the term. This is a sensible safety net, but should not be the reason for choosing a higher instalment than is affordable. Read whether a payment holiday incurs costs and whether it extends the term.
Recommendation for aesthetic procedures
For the usual amounts between €3,000 and €20,000, a sensible term is usually between 24 and 60 months. A procedure is not an investment that pays for itself over ten years – a loan that runs longer than the memory of the appointment stays fresh will at some point feel wrong. Choose the shortest term whose instalment you can comfortably afford, and compare the offers by APR.