Now compare installment credit and secure long-term low interest rates for your personal loan
Almost everyone has experienced this situation before: Something in the household fails his service, an expensive repair to the car is pending or a financial bottleneck threatens because the employer does not pay on time. The required money is not there. In such situations, only a cash injection can help – an installment loan is the solution. For many purposes, an installment loan may be included, the particularity of which is that such a loan is repaid monthly in equal installments; the rates do not change during the entire term. The installment loan can be applied for across different terms and with different loan amounts. The conditions differ between the different banks, the direct banks, which work online and save costs, charge particularly low interest rates. They pass on this advantage to their customers. In order for your loan to cost you as little money as possible, it is important to find the right bank. The loan comparison helps you to choose the right bank and provides you with a comprehensive overview of interest rates at various banks. Quickly you can select the right bank from the credit comparison and apply for your installment loan there.
What is a installment loan?
An installment loan is characterized by very specific criteria. It is paid out in one sum and repaid in equal monthly installments; The last installment, the final installment, may differ in size. In the loan comparison, the interest is fixed for the entire term, it remains the same throughout the term. The monthly installments consist of an interest portion and a repayment portion. At the beginning of the term, the interest portion outweighs, but at the end of the term shifts this ratio, the interest portion is getting smaller, while the repayment share is getting higher. Installment loans are granted with terms of 12 to 84 months, sometimes up to 120 months, and with loan amounts of 1000 to 100,000 euros.
What you should know about the interest rates on the installment loan
Interest rates for the installment loan are differentiated between the debit interest and the effective interest rate; the debit interest rate is the price that the customer has to pay to provide the loan. The effective interest rate includes the borrowing rate and additional costs incurred for this loan. If you would like to make a special repayment on your loan or take out a voluntary residual debt insurance, in the event that you can not pay the installments, there are additional costs. These costs do not fall below the effective interest rate, but are added to the rate for the month in which you claim these benefits. For a loan to private individuals, the banks may not charge any processing fee. Since the interest rates differ between the different banks, you should use the credit comparison, which informs about the interest rates for your loan request to the various banks.
The ratio of installments, term and loan amount
Before you apply for your installment loan, you should plan it thoroughly, as you have to repay the installments over a longer period of time and take on a financial burden. The lower the loan amount and the longer the term, the lower the installment. Would you like to be debt free again quickly, then the shortest possible n is recommended, but drives the rates in the air. You should compare your monthly income and the fixed expenses such as rent, electricity costs, insurance premiums and telephone charges in order to determine favorable rates for you. Consider the sums you need to live each month, as well as unforeseen events that require financial flexibility.
The rate of interest on the installment loan differs depending on the bank, but the higher the loan term, the higher the interest. Our credit comparison helps you to determine the interest rates at the different banks depending on the loan amount and the term. The intended purpose can also affect interest rates. While some banks charge interest rates independently, other banks fix interest rates depending on the applicant’s creditworthiness.
Why the credit rating plays a role
Banks need to hedge against the risk of default when providing loans and therefore check the creditworthiness of the applicant. With a good credit rating, it is likely that the borrower will repay the monthly installments on time, while a bad credit rating is likely to default. If the credit rating is poor, the bank rejects a loan application – not only for its own, but also for the protection of the applicant. Finally, the applicant should not get even deeper into debt due to the additional financial burden of repayment. The applicant is protected from a private bankruptcy. If you would like to apply for an installment loan, you must submit various credentials to the bank. You will need to present an income certificate from your employer or, if you are self-employed, a tax return, and account statements for the past three months will continue to be required. The occupational situation with the type and safety of your profession plays a role in the credit check as well as the housing situation, whether you own a home or live for rent, and the marital status. Interest rates are lower, the cheaper your credit rating.
Prerequisite for the installment loan
To apply for an installment loan, you must meet certain requirements, whether you want to take advantage of your loan from a branch bank or a direct bank. With regard to creditworthiness, there are differences in the various banks; while some banks set the bar very high, other banks are less strict. However, each bank collects a Schufa statement to check whether the applicant has a negative Schufa entry. In the case of a negative Schufa application, no loan can be granted as the risk of default is too high. Conveniently, a previous loan can affect your credit rating if you have always repaid it on time; such information is deposited with the Schufa. To apply for an installment loan, you must be of legal age, have your main residence in Germany, have a permanent employment contract, earn a regular income in the appropriate amount and have an account in Germany.
Uses for the installment loan
The installment loan can be applied for without earmarking, but the conditions may be more favorable if you specify the purpose in the application. Conveniently, the conditions for a car loan can fail because the purchased vehicle serves as collateral and the bank can make use of it in the event of a payment default. A rescheduling can also have a favorable effect on the terms, because this is a loan on more favorable terms, with which you replace one or more existing loans.
The online credit comparison – fast and convenient
Our credit comparison helps you to save money on your installment loan, as you can compare the banks and choose the bank with the most favorable terms. For a variety of uses, for different maturities and loan amounts, you can find the right loan with the loan comparison and quickly apply for it.