Credit comparison Germany 2019 – Personal loan
Instant and instant credit: German banks have come under pressure in recent years, among other things, due to the low-interest rates and had to offer new financial services in order to remain competitive and to convince customers. Particularly in the area of installment amaryllis to private customers, competition between individual banks has increased sharply. Therefore, instead of relying on absolute low-interest rates, more attempts are being made to convince through the services offered.
One of these services is instant loans, which are also referred to as authorized amaryllis. The peculiarity here is that it represents a special variant of the quick loan and is already preapproved in the application for the loan and thus ready to call. If you need the loan, you only have to pay it off.
Often, however, such amaryllis is only offered to existing customers. This quick procedure is possible because knowledge of the creditworthiness is already available and the bank can thus say in advance which persons qualify as potential borrowers. Therefore, from the point of view of many borrowers, this financing alternative is very attractive – especially when a loan is needed as quickly as possible. Then the credit check is eliminated and the payment can be promptly made. Thus, a lot of time can be saved.
As a borrower, you should also scrutinize this funding alternative before you close it, as preapproved and instant amaryllis do not necessarily have to be your best bet. It should always be checked if there are alternatives and what they have to offer for conditions. As already indicated, it may happen that the required interest rates are not optimal. It may be possible to get a cheaper loan from other banks.
Under certain circumstances, it is then worthwhile to accept a longer waiting period and thus obtain better credit conditions.
In everyday language, both terms are often used the same, but there is a subtle difference, namely, the duration of the contracts and the amount of the loan or loan amount is crucial. Long-term and higher-end bonds are mostly called loans, while shorter-term and lower-denomination bonds are called amaryllis. Thus, the loan represents a special.
The loan or loan amount is provided by a credit institution either once or in individual installments to the loan applicant. The gradual repayment and payment of interest is usually at pre-agreed rates paid periodically to the credit institution. The term of each amaryllis is agreed in advance as part of the loan agreement between the borrower and lender and depends on many different factors.
In general, maturities of less than one year are associated with short-term amaryllis, between one and four years of medium-term and longer than four years. For the requirements of credit approvals, see “Prerequisites for a Credit Approval”.
This is a consumer credit that relates either to a personal project such as the purchase of a new car or the handling of unforeseen expenses. In the first case, we speak of a special purpose loan that is regularly repaid and linked to a specific purpose.
As a borrower, you often have to provide proof of purchase or prove that your loan is earmarked (eg cost estimate for the car). In the second case, we are talking about a non-earmarked loan without a specific purpose.
However, this special form always has the following characteristics: it is a fixed-rate loan with an annual percentage rate and constant monthly repayment installments, the loan ceiling is in Germany at 75,000 euros, the term of the loan is generally between 6 and 60 months and the terms such as term, loan amount and repayment installments are agreed in advance upon conclusion of the contract and can not be changed during the repayment term.
There are many different reasons why individuals seek to accept from a government-certified financial institution such as a bank: with a loan, consumers often fulfill important needs such as a home or a new car, repurposing existing debt, or unforeseen but necessary one’s Issues edged. The reasons are as varied as the different types of credit.
But before a loan is approved by a lender, it checks and determines whether the most important requirements are met, so that the loan can also be repaid. As a rule, a permanent employment relationship, as well as a regular, fixed salary, play an important role here. In addition, other conditions may, of course, be crucial to the approval, such as reliable assets and collateral in the form of investments or real estate.
Basic requirements for the loan approval in Germany
As a rule, the conditions for granting a loan in the German market for private financial services differ only slightly between the individual banks. As a borrower so only an adult person is eligible, which has its officially registered primary residence proven in Germany. If you submit your loan application directly to a branch, you must present your photo ID as an applicant.
When applying for a loan online, the age and identity verification is carried out at the latest when the video procedure is being carried out. In particular, online banks without branches sometimes carry only an Internet-based identity determination.
In addition, a German bank account is another requirement for lending by the lender. This has regulatory and legal grounds of liability and hedging in the event of loan default. In addition, the agreed loan amount is transferred via this bank account and the monthly installments due are also deducted from it. The German bank account also simplifies the query at scoring agencies.
In addition, you should be aware that you can act on your own account and thus use the loan provided solely for yourself and the project specified in the application. Misappropriation of the money is inadmissible.
Individual steps of a loan
The bank from which you want to lend money primarily has an interest in being able to repay and service or repay the borrowed money – the loan – plus the agreed interest. Therefore, the initial examination of your private financial situation represents the first important step on the way to a successful loan application.
The hedging of the risks on the part of the Bank, therefore, takes place primarily through an examination of your current employment relationship and the associated income. These provide a good insight into expected future revenues and the expected financial situation of the loan applicant. However, there are a number of hurdles to this: Many lenders require the borrower to have an indefinite employment contract, and sometimes even that you have been employed by the employer for at least six months.
These requirements can be interpreted differently in detail, but a fixed and regular income requires borrowers with each loan! With an explicit contract clause, lending institutions such as banks ensure that in the event of a payment default, a seizure of wages takes effect and you thus continue to service the loan. Alternatively or additionally, additional collateral such as real estate or investments may be required.
Such collateral can be an asset in credit applications as it enhances creditworthiness, which, among other things, is based on interest rates and other conditions.
For some categories of applicants, such as young professionals or self-employed persons, these requirements pose a particular hurdle: self-employed persons are by definition not employed and young professionals are usually employed on a temporary basis and have no major capital or real estate assets.
In order to provide these applicants with credit, a few banks have special amaryllis for these groups and require, as an equivalent to account statements, for example, the income tax assessment of the last year or special statements by the principal bank. As a rule, the interest rates for lending to the self-employed and young professionals are slightly higher than those for permanent, permanent employees. But again, the creditworthiness is crucial again.
Checking for creditworthiness
In addition to the examination of the employment relationship, the creditworthiness of the borrower also plays a significant role in the lender’s considerations regarding lending. The credit check in Germany is usually carried out.
The General Collateral Association cooperates with credit institutions, mail-order companies or communications service providers who pass on their personal data and obtain information on new customers through a database query.
Based on this data from cooperation partners, an evaluation of your business behavior is determined, the so-called score. This score from 0 to 100 gives banks information about the applicant’s creditworthiness. 100 means optimal creditworthiness with very low default risk. The bank also receives information about ongoing amaryllis as well as pending payments from eg other and online orders via the information.
They are entered into the file of the consumers. Based on this calculated willingness to pay, the lender will then make the decision on the loan approval, the amount and the interest accrued.
Anyone looking for a loan can quickly lose track of the many different offers and conditions. Nevertheless, the first credit offer should not be accepted, because the costs can be significantly different. A good credit comparison can, therefore, save a lot of money.
The total cost of a loan depends, among other things, heavily on the chosen term. If the customer repays comparatively large amounts monthly, the loan can be repaid quickly. As a result, interest must be paid over a shorter period of time, which then tends to be lower, especially towards the end, since then a large part of the loan has already been repaid.
A good reason for the longer term is the lower financial burden. Monthly smaller amounts are required for repayment, leaving more money available to borrowers for other expenses.
Which term is optimal for a loan depends on the individual requirements. A loan should not have unnecessarily long maturities, but care must be taken to ensure that the monthly installments do not become too heavy a financial burden.
In the credit comparison, credit offers with similar maturities should always be compared in direct comparison.
Objective compare – the annual percentage rate
In addition to the actual interest may incur additional costs, which should also be considered in a credit comparison. This can be, for example, processing fees. All costs incurred are taken into account in the annual percentage rate.
This size includes all fees and indicates these converted to the year. This makes it easy to compare different loan offers.
Special repayment – If the loan is repaid earlier
Once the borrower has more money available than they need, it makes sense to repay a loan in whole or in part earlier than the contractually agreed date. The costs incurred by the annual interest can be reduced so that the credit is cheaper overall.
However, special repayments are associated with additional fees for many lenders. Although this can still save costs through previous repayment costs, the fee is quite significant.
If you want to remain flexible despite the loan agreement, you should, therefore, prefer a lender that allows free special repayments. For some providers, such repayment is possible once a year, without incurring additional fees.
Use the credit calculator and find the cheapest offer
Various loan calculators can be found on the internet. It is important that the APR is always compared since otherwise, the comparison is not very meaningful. In most cases, the loan calculators also take into account current changes in the conditions, because the banks themselves are interested in gaining customers through the credit comparison and provide their own terms and conditions.
The interest and charges determined by the credit calculator are only a price calculated on the basis of the general information. Exact terms are set individually because the bank takes on a different risk for each client.
The more collateral the borrower can offer, the lower the interest on a loan. Therefore, after identifying the best providers for a loan, the potential clients should submit a non-binding loan offer from them.
This is now also possible online via various comparison platforms or directly via the provider.
Now compare offers and replace expensively
A credit comparison is not only useful if money is needed for purchases or the like. Anyone who already uses a loan should also regularly compare the current conditions of the various providers. Under certain circumstances, it is possible to obtain a significantly cheaper credit and replace it with the existing one.
This can save costs so that in the end more money is available for other things. However, such a comparison should also take into account that the premature repayment of a loan often incurs additional costs.
Only if the savings from the new loan are so high that these costs can be covered, is it worthwhile to restructure existing debts?