With credit comparison: the search for the right loan

Borrowers can now benefit from an enormous variety of loans on the market. In addition to the numerous house banks and savings banks, numerous online banks are now available to borrowers to select the loan. Online banks in the Internet, in particular, have seen significant growth in demand in recent years. In addition to low-interest rates, the providers on the Internet also offer the borrower an easy application, quick availability of the loan and flexible contract design. Due to the enormous increase in supply in recent years, the conditions for the borrower have changed significantly. The borrower can benefit from low interest rates, but he has to accept significantly more difficult conditions when comparing them. Since the conditions for the individual loan offers to prove to be very different, it is hardly possible for the borrower to find the best loan offer without comparison on the Internet.

The search for the right loan

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When looking for a loan, borrowers should focus primarily on the interest rate. The interest conditions are decisive for the total loan costs and are therefore of crucial importance for many borrowers. Borrowers should definitely differentiate between target and effective interest rates when comparing. The debit interest rate is used by many banks for advertising purposes, as it is significantly lower than the effective interest rate. Accordingly, the borrowing rate has only a limited role in total loan costs.

Borrowers who want to achieve an objective comparison result should focus on the effective interest rate when comparing loans. In contrast to the borrowing rate, the effective interest rate also takes into account fees charged by the bank when granting the loan, as well as individual conditions for the loan specified by the borrower. The borrower’s credit rating has a major influence on the effective interest rate. The creditworthiness today is primarily defined by the borrower’s income and private lender information. Borrowers with a high income can benefit from low effective interest rates due to their high solvency, the same applies to borrowers who have positive Schufa information.

Importance of term and loan amount in the search

Term and loan amount is not only important for the amount of effective interest or total loan costs. The borrower can also define the repayment by selecting the loan amount and term. Short terms ensure that the repayment is high and the borrower can benefit from low borrowing costs. By selecting a short term, the borrower is also exposed to a high level of liquidity, which means that he faces an increased risk of default. For this reason, borrowers with a limited income should always have a long term. Here the borrower has to expect higher borrowing costs due to the slower reduction of the remaining debt, but the credit default risk can be significantly reduced with a long term and a low loan amount.

Consider the possibilities of repayment

Borrowers should always choose the loan offer with regard to repayment. Today, most banks offer installment repayments, since these are considered to be inexpensive and very predictable for the borrower. The repayment installment offers the borrower the advantage that the repayment is made in constant installments at equal intervals.

A constant liquidity burden can, therefore, be ensured for the borrower. Because the remaining debt is quickly reduced when the installment is repaid, the borrower can benefit from falling loan costs with increasing repayment. Because the repayment can be planned well for the borrower, the bank can also benefit from a decisive advantage, which can be seen in the low credit risk.
In addition to the widespread repayment of installments, many banks now also offer annuity and remaining debt repayments. The annuity repayment is characterized by the fact that a constant annuity has to be paid to the lending bank, which consists of repayment and interest. During the term, the repayment portion increases and the loan portion decreases, so that the borrower can pay an exactly identical amount at equal intervals.

The importance of instant credit

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Even today, the private lender still has a decisive influence on the granting of loans of all kinds. The protection association for general credit protection collects all data that could be of importance for the granting of loans. In the Schufa file of every consumer, in addition to existing credit obligations, contractual obligations such as rental contracts are also recorded.

Borrowers who can provide positive private lender information can look forward to a low effective interest rate, whereas borrowers who have a negative private lender often have to count on the rejection of the loan contract or alternatively resort to a loan without a private lender. The credit without a private lender is characterized by the fact that no private lender information is taken into account in the credit check.
Online lending makes it easy to apply for any loan offer. After searching for a suitable loan and choosing the best loan offer, the borrower can turn to the loan application.

With credit comparison search for the right loan

With credit comparison search for the right loan

Credit calculators give the borrower the opportunity to compare several offers and to find the best loan offer. By taking the term, usage, loan amount, repayment and income into account, the borrower can directly filter out the best loan offers. The search can then be rounded off by a direct comparison of the best offers and the cheapest loan can be selected. By comparing loans online, the borrower can permanently secure the best effective interest rate and significantly reduce overall loan costs.