Installment credit comparison

Where can I get a cheap loan? How much credit can I afford? Do I slide into the debt trap with a loan? Read the news on installment loan.

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What do I have to look for when applying for credit? Term, cancellation, interest, no matter what topic you busy – you will find the answer in our guide.

That’s what matters

A popular loan type for private purchases is the installment loan. Virtually every bank or savings bank offers its customers such consumer loans. In addition to financial institutions, most retail and mail order companies rely on the proven form of installment payment. At the dealer, however, buyers are not paid any money, but a certain amount of goods, the equivalent value then they have to pay back piece by piece – similar to the installment loan.

Installment loan and its interest

In the classic installment loan, consumers borrow money from the bank, for example, to make a larger purchase. The maximum loan amounts fluctuate depending on the provider usually between 25,000 and 50,000 euros. In return for the money provided, the bank charges interest. The amount of interest depends on the general interest rate level on the capital market, the repayment term (months) and the bank’s profit margin. The total amount of the installment loan is calculated from the sum of loan funds and interest, which then has to be repaid to the bank in monthly installments. Advantage: The amount of the installments and the duration of the repayment are fixed, so that the burden of the installment loan can be calculated exactly for the entire term.

The correct amount of the installment loan

Three factors determine the amount of the monthly loan installment: the loan amount, the interest rate and the term. The principle applies: the higher the loan amount or the higher the loan interest, the greater the monthly burden and vice versa. Debtors with inexpensive installment loans from direct banks, which you will find in our installment loan comparison, cost low-cost. The installment loans of national commercial banks such as Commerzbank, but also almost all savings banks and Volksbanken and Raiffeisenbanken are almost always significantly more expensive than the installment loans of ING or the German Kreditbank (DKB).

Who gets a installment loan on the internet?

Most direct banks only issue installment loans to people with a fixed income, whether they are employees, workers, civil servants (especially popular!) Or retirees. The credit rating (credit rating) plays an important role. However, self-employed loans are bad for most banks. Exceptions here are the Netbank or Barclaycard. With the latter provider, these loans are more expensive. Probably because the workload is greater. To interpret a balance sheet requires more work and staff than to compare the information from the last three pay slips with the claimant’s details.

Installment loan and term

The monthly burden can also be influenced by the duration of the installment loan. The longer the repayment term, the lower the monthly installment and vice versa. Those who value quick repayments must shoulder high loan installments. For this he is debt-free in a relatively short time. Anyone who favors the least possible monthly burden can extend their term. If there is more time to repay, the rate drops and the financial scope grows. Disadvantage: The longer the installment loan runs, the more interest you have to pay to the bank. When setting the repayment term, it must also be remembered that each item has a certain useful life. For example, the installment loan for a car should in no case run longer than the intended holding period of the vehicle. Otherwise it happens that you are already looking for a new car, the old but not yet paid off. In the worst case, there is a double credit burden.

Installment loan and special repayment

Many consumers think that special repayments are only possible within the framework of mortgage lending. But even with classic installment loans, banks today make cost-saving extra payments possible. The benefits of interim amortization are obvious: borrowers thus reduce the total interest burden of the loan, and they are faster debt free.

Example: You take out a loan of 15,000 euros from your bank. With a five-year term and an effective interest rate of 3.79 percent, the loan costs just under € 275 per month, and the total costs amount to € 16,464. If you pay a one-time special repayment of 1,500 euros after two years, the duration will be reduced by half a year, to four and a half years, and the total costs by around 160 euros to 16,305 euros. If a new special repayment of the same amount succeeds a year later, the term will be reduced by a further almost six months and the total costs will drop to 16,236 euros. Overall, you would then have saved almost 230 euros in interest and would be debt-free for almost a year.

Important: When making a loan, make sure that you do not incur any special repayments.

Installment loan and termination

Since mid-2010, there are the following rules for the termination of installment loans: You can always terminate the loan. However, the bank or Sparkasse may charge you a prepayment penalty. Their amount is limited to one percent of the loan amount. With remaining terms of less than one year, however, it is only 0.5 percent of the loan amount.

When you make a installment loan, you should always opt for a provider who refrains from such fees from the outset and leaves the customers at any time without these costs from the contract if they want to replace the loan early. Such a provider is for example the ING.

Installment loan: it is essential to compare interest rates

The installment loan is worth a precise interest rate comparison. The offers for installment loans are far apart. Some providers offer consumer credit with up to double-digit interest rates, others are less than three percent. Those who choose an expensive offer will pay twice as much for a cheap loan.

The installment loan comparison on biallo.de shows the currently most cost-effective offers on the market. You can start a credit request directly from your favorite bank online. And: Usually within a few seconds, you will receive feedback on your loan request from the selected bank, including an online credit check, whether your financing is possible and what exactly the conditions are for you. Then you can start and you can submit your loan application signed at the respective bank of desire. As a rule, your preferred loan is in your checking account after three to five working days.

Even dealers offer, for example, when buying furniture a favorable installment loan. Disadvantage: You are no longer a cash payer and do not get a discount on buying furniture. Therefore, a bank loan is almost always cheaper.

You do not get a installment loan?

It happens again and again that a loan request is rejected by the bank – for example, after their data was considered not fully creditworthy.

Certainly annoying at first, but there are some ways to get the credit you need:

Check your own creditworthiness, for example with the Schufa
Reduce loan amount
Extend the term of the loan
Find allies that provide additional security, such as your partner, relatives or acquaintances
Continue to search, compare and try again at another bank

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