When researching the Internet, the interested party will find a large number of different types of credit. On closer inspection, however, there are only three that customers deal with over the course of their lives. The most common type of credit is consumer credit, which is often also called installment credit. This includes loans for vacation trips, the purchase of a car or a new washing machine. A credit line is convenient. If you have an account with a regular income, you get an overdraft limit. Finally, the real estate loan should be dealt with, since these usually have a very long term and lower interest rates than the other two variants.
A consumer loan for larger and smaller expenses
The new television, a car, the next vacation trip – all of this costs money and those who currently have a low account balance have to finance these expenses with a loan. In most cases, these debts are repaid within several years or months (for smaller purchases). The most important requirement for most loans is a positive Schufa score. Anyone who was unable to pay bills in the past and was in arrears with the loan installments gets a negative entry, which makes borrowing much more difficult. Often only one helps credit without. However, this is associated with higher interest rates, and the loan amount and term are limited.
The interested party can take out a consumer loan at the local bank or on the Internet.
A credit line for small purchases in between
A Dispocredit is easy, because no loan agreement has to be signed and there is no request from the Schufa. After setting up an account and several incoming payments from the employer, an overdraft facility is usually set up automatically. Customers often do not even have to apply for it, it is granted to them automatically. However, the interest rates are higher than with an installment loan.
Although it is easy, one should not overdraw the account for a long time. In addition to the costs, your own credit rating is also a problem. Suppose the account holder becomes unemployed or is ill for a long period of time. In this case, he receives wage replacement benefits (unemployment benefit, sick pay). There is no regular receipt of wages, which means that the bank terminates the overdraft facility. In this case, the account holder must repay his debt immediately.
The real estate loan for the construction or purchase of houses and apartments
A home loan is a low-interest, long-term loan. A house or property represents a security that the bank can access at any time should the borrower fail to meet his obligations. The term of a loan agreement is either five, ten or fifteen years. The rule of thumb is: the longer the loan term, the higher the interest rates. How long a loan agreement is concluded depends on the expected interest rate development. If interest rates are currently high, it is better to choose a shorter term. If they are very low, a longer repayment can be worthwhile because the borrower benefits from the low interest rates.
You should pay attention to this when borrowing:
- Interest charges
- Duration
- Possibility of interim repayment
Conclusion
A accident, the computer no longer works properly or a move is imminent are just some of the reasons for taking out a loan. Most consumers take out an installment loan that they pay back monthly. An overdraft facility is easier, because no loan agreement has to be filled out here. However, this is only recommended if the debt can be repaid within a short period of time. If you want to build a house, you take out a real estate loan because the conditions are particularly favorable here.
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