The essentials in brief:
- A consumer loan enables private purchases with flexible repayment options, depending on the borrower’s creditworthiness.
- The effective annual interest rate, which includes all costs, is crucial for comparing the true loan costs.
- Finanzcheck and Smava, for example, can help you compare before taking out a loan.
A consumer loan is intended exclusively for private consumption and supports a wide range of projects – be it financing a long-awaited vacation, purchasing new home furnishings or balancing your current account. The special feature of this loan lies in its flexibility and the different forms in which it is offered, such as an overdraft or installment loan.
How much can a consumer loan be?
The credit institutions set individual maximum limits for an overdraft facility, while installment loans usually range from 1,000 to 100,000 euros, with most offers being in the range between 5,000 and 50,000 euros. For larger sums, such as building financing, amounts over 100,000 euros are also possible.
The repayment period for an installment loan usually varies between one year and ten years, with the term depending on the loan amount and the agreements with the bank.
There is also a variant of consumer credit specifically for buying a car, the car loan, which is often granted on more favorable terms. The reason for this is the security that a vehicle offers as a material value – in an emergency, the car can be sold to repay the loan.
With this type of loan, the registration certificate Part II can be deposited as security.
Before taking out a consumer loan: This is what you should pay attention to
First of all: It is always best not to have to take out a loan at all. The decision to take out a consumer loan should therefore be carefully considered and take into account your own financial situation and specific needs. The variety of loan offers makes it possible to find tailor-made solutions for individual life situations and to cleverly expand financial scope. But what should you pay attention to?
The interest rate
The interest rate plays a central role when deciding on a consumer loan. It is possible that the interest rate will be adjusted based on the applicant’s individual creditworthiness: the better the creditworthiness (creditworthiness), the cheaper the interest rate can be. Alternatively, loans are offered with a fixed interest rate that remains the same regardless of creditworthiness. This flexibility makes it possible to find a loan that is the best financial fit – for example with portals such as Finanzcheck or Smava.
Don’t just look at the borrowing rate!
In order to identify a good consumer loan, it is not enough to simply look at the borrowing rate. The actual costs of a loan are largely determined by the way the repayment is offset.
The effective annual interest rate, which, in addition to the nominal interest rate, also includes all other mandatory costs such as repayment offsetting, is therefore an important comparison value. It makes it possible to directly compare the total costs of different loan offers.
However, the effective interest rate does not include all additional services
An exception to the cost calculation is residual debt insurance. This optional additional service, which covers the credit risk in the event of death, unemployment or occupational disability, is not included in the effective annual interest rate.
The costs for residual debt insurance can vary significantly and depend directly on the respective loan provider, which makes it difficult to compare the actual loan costs.
Can the loan be repaid early?
Flexibility in repayment is another important criterion when choosing the right consumer loan. Many providers allow their customers to repay up to 50 percent of the remaining debt early once a year without additional costs. The payment pause option can also be very useful in certain situations.
A comprehensive comparison that takes all of these factors into account is crucial to finding the loan that best suits your personal financial conditions.
The path to consumer credit
Basic requirements for borrowers
Almost every consumer with a checking account has an overdraft facility that allows for spontaneous spending. But for larger sums or long-term financing, the installment loan is the first choice. The basic requirements for this are clear: a German residence, being of legal age, a solid credit rating and often a permanent employment relationship outside of the probationary period.
Special cases in the credit world
In addition to classic bank loans, there are also special forms of credit. Employees can sometimes benefit from a loan from their employer, a voluntary benefit that is not tied to salary receipt.
Civil servants and public sector employees often enjoy more favorable conditions thanks to their secure employment. Self-employed people and freelancers, on the other hand, face stricter requirements because banks consider them to be higher risk.
However, if you own a property, your chances of getting attractive loan conditions improve significantly.
Stronger together: Loan with co-debtor
Students and pensioners are often faced with the challenge of not receiving the ideal loan conditions. The solution can be a joint loan application with a second borrower who has a stable income. This increases the attractiveness for the bank and often leads to better conditions.
Refinance and save
Existing loans with high interest rates can often be replaced with a debt restructuring offer with more favorable terms. If early repayment is not possible free of charge, an early repayment penalty will apply, the amount of which is regulated by law and therefore remains transparent.
Consumer credit, yes – but only after an extensive comparison
Consumer loans open doors to financial opportunity, but require careful consideration of individual circumstances and offers. From the type of loan to the creditworthiness requirements to the possibility of debt restructuring – choosing the right loan can make a significant contribution to financial satisfaction. Comparison portals such as Finanzcheck and Smava help with this.
Frequently asked questions about consumer credit
Is there a way to deduct the consumer loan from taxes?
In most cases, interest on consumer loans cannot be claimed for tax purposes because they are used for private consumption. There are exceptions if the loan was taken out directly for professional or business purposes. It is worth consulting with a tax advisor here.
How quickly can I access the money from my consumer loan?
The availability of the money depends on the lender and the verification process. As a rule, borrowers can assume that the money will be in the account within a few working days after a successful credit check and contract signing.
Can I subsequently change the purpose of my consumer loan?
As a rule, the purpose of a consumer loan is not specified when it is taken out, unless it is a specific-purpose loan, such as a car loan. A subsequent change to the intended purpose is usually not necessary, but should be discussed with the lending bank if it is a loan for a specific purpose.
2024-02-22 08:00:58
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