Favorable credit – interest rates in comparisonOn March 30, 2020 by admin
Obtaining a cheap loan is of course in the interest of every loan seeker, unfortunately finding cheap loan interest often turns out to be not so easy. There are several reasons for this: on the one hand, banks always advertise their loans at an exemplary interest rate for a borrower with a very good credit rating – the fact that these conditions do not apply to every borrower usually only becomes clear in the consultation .
Interest based on creditworthiness
For most loans, the amount of interest depends on the creditworthiness of the borrower – the creditworthiness is also important with regard to the question of whether the loan is cheap or not. For this reason, such loans always advertise with an interest rate of as many percent – for example 3.9% pa with a small installment loan.
The assessment of the creditworthiness, which results in the applicant’s scoring, consists of different steps: If the loan is applied for in Germany, Schufa information is usually obtained, which gives a first impression of the financial situation of the interested party. In addition, there are things such as bank statements, provided the loan is not taken out at the house bank, copies of wage slips and the employment contract for employees, the balance sheet of recent years or income surplus calculations for self-employed persons. The bank then prepares the so-called household bill, which shows whether there is any monthly capital left in the household that is sufficient to repay the loan installments.
Interest is based on the amount of the loan
Interest can also be fixed on the loan amount – every now and then also in addition to the orientation on the creditworthiness of the borrower. This is particularly true for construction finance, ie long-term finance with a large loan amount. Interest rates decrease with increasing term, but of course this does not mean a reduction in total costs – rather, the particularly long term automatically results in higher costs, even if the interest rate may be somewhat lower.
It is rare to find loans with fixed interest rates, which means that they do not change their amount, no matter how high the loan amount or how good or bad the applicant’s credit rating may be. In theory, those with poor creditworthiness in particular benefit from such loans because they would normally have to accept an interest premium – in practice, however, it turns out that such borrowers receive a loan cancellation. People with good and very good credit ratings, on the other hand, tend to pay more for these loans and should look for another offer.