A cheap installment loan? Not easy to find – is it? German citizens are living more and more “on pump”, as current statistics show quite clearly. The volume of credit granted to households increases from year to year. One of the main reasons for this steady increase in credit is undoubtedly the Cream Bank’s low interest rate policy. So it is not surprising that in such a time, the desire for a new kitchen, a new car etc. takes on concrete forms with one or the other consumer.
However, if you do not have the necessary capital to finance such wishes, you are now making use of one of the numerous, very cheap loan offers. There is hardly a bank that does not advertise with particularly favorable credit terms right now.
But be careful, because a cheap installment loan is not only characterized by the fact that it is particularly low-interest. Our checklist for installment loans reveals which criteria should be given special attention to in installment loan offers.
Favorable installment loan: the most important points
A cheap installment loan from banks is usually valued on the basis of a low interest rate. However, if you need a cheap installment loan, you should also know a few other criteria according to which a cheap installment loan excels. When choosing a suitable installment loan, the following points should be included in the selection and final decision.
Credit from the branch bank or internet bank
It is undisputed that online loans from so-called internet banks have a clear advantage in terms of loan conditions compared to traditional branch loans. After all, the pricing of so-called structural costs for online loan offers is significantly lower than for a purely online bank with a lean cost structure. These savings are usually passed on to credit customers using a lower interest rate.
The disadvantage, however, is that pure internet banks rarely offer personal advice with qualified advisors. This can certainly result in a disadvantage for unprofessional borrowers if conditions are not properly understood. So the best thing is to find an internet bank that deals responsibly with its lending and therefore also provides a certain range of advice.
Instant credit with online approval after a few seconds
When it comes to a loan, the basic principle is how quickly the money is actually needed. Modern online loans work with very time-saving technologies such as the video identification process, the Tan process for digital signatures and the digital account check, with which creditworthiness is checked.
Time-consuming activities such as the classic post-identification process and the postal exchange of necessary documents are no longer necessary with these technologies. If you can get used to these technical possibilities because the loan is needed particularly quickly, you should look for loan providers who use these technologies in the context of a loan offer.
Need-based installment loan
Taking out an installment loan should always be considered carefully. One of the basic requirements is to be clear about what the loan should be taken out for and whether this can be afforded in the long term. In plain language, this means that you have to be aware of a rate burden for the next months or years. The loan installments must therefore be permanently affordable for the borrower.
In addition – for example when renovating or buying a car, you should look out for special loans, because these often have very favorable special conditions. The following applies here: The credit at your free disposal must not necessarily be the best choice! on the contrary: A cheap installment loan can arise precisely because of a purpose limitation!
Right of withdrawal for a loan is a MUST criterion
As a borrower, you should always pay attention to an extended right of withdrawal for the installment loan. The statutory cancellation period is two weeks, individual providers allow twice as long a period. This issue must always be addressed to the bank. The goal should be to achieve a maximum objection period of 4 weeks without additional costs or any other disadvantages. Because a cheap installment loan also means being able to withdraw from your loan project!
Keyword special repayment law: Reduce rates and term with special payments
For the duration of a loan, the following always applies: “The shorter, the better!” As a borrower, it is possible to reduce the monthly loan burden due to the loan installments due to bonus payments, Christmas bonuses, tax refunds, etc., this should also be done. The prerequisite for this is that the bank grants a special repayment right without additional costs due to administrative expenses. These special repayments should at best be possible in any amount and number, because in this way the interest costs can be significantly reduced.
Inexpensive installment loans have a fixed interest rate
Favorable interest rates on a loan offer are often eyewash. Because they are based on the assumption that a credit customer has an extraordinarily good credit rating. However, the credit rating of the credit customer associated with the offered interest rate is not guaranteed.
In plain language, this means that the loan is often significantly more expensive than the originally selected loan offer suggests. Therefore, as a borrower, you should only consider those loan offers that guarantee a fixed interest rate over the term. This also ensures that no interest rate hike can occur during the term of the loan. A cheap installment loan is therefore firmly calculable!
Pay breaks in the loan give room for financial problems
Loans that allow one or two payment breaks for one month each year help to master financial critical periods such as the holiday and / or Christmas season. If a break in payment is claimed, the open installment can either be paid out of sequence or the loan term is extended accordingly by the number of months suspended.