In the second quarter of 2018, 4.5 percent more loans were granted than in the same period of the previous year. In total, individuals and businesses received loans worth € 27.47 billion. Interest rates were 0.44 percent higher than in the second quarter of the previous year. However, many consumers could have saved significantly by completing their new loans on the Internet. A credit comparison portal came to the conclusion that an average installment loan on the Internet would have been 37 percent cheaper than the national average.
Loans online significantly cheaper
With a loan from the Internet, consumers could save an average of 2.11 percent compared to the nationwide average. This shows that the differences in interest rates are becoming increasingly clear. If all borrowers had completed their loans on the Internet in the last quarter, they would have saved a total of over 765 million euros, according to figures from a credit comparison portal, the Private credit and the bank.
The annual percentage rate of charge for lending on the internet in the second quarter of 2018 was 3.96 percent. This was 0.46 percentage points less than a year ago. However, according to the Bundesbank, interest rates remained almost the same in the federal average. If you paid 5.82 percent interest in the second quarter of the previous year, it was only 0.02 percent lower in the second quarter of this year.
On average almost 10,000 euros loan amount
From figures of the Private credit shows that the people in Germany take on average a loan amount of 9,367 euros. The term is calculated according to the calculations of the credit agency on average 46.8 months. The interest rates are in the national average at 1,091 euros. However, anyone who had opted for a loan from the Internet paid on average only 692 euros in interest. The differences can therefore be up to 400 euros (36.5 percent).
Many car loans granted in the first half
In the first six months of the year, loans were especially popular for new and used cars. In total, individuals and businesses borrowed 77.3 billion euros for a new car. Car loans had a large share in the five percent more new loans granted. The lending banks financed a total of more than one million vehicles in the first half of 2018 ; an increase of 5.5 percent.
Especially for new cars, the Germans took a loan. For this, the number of new loans increased by 8.3 percent. This number is even higher than the number of new car registrations over the same period, which increased by only about three percent. In addition, four percent new loans for used cars, although the number of ownership transfers fell by 2.1 percent compared to the same period last year.
Car buying on credit is very popular
These numbers show that buying a car on credit is becoming increasingly popular. This makes cars very important financing assets for companies and private individuals. The lending banks allocate more than half of their investment finance and more than 40 percent of their consumer loans to new cars. The number of vehicle loans for companies increased by only one percent, but for private individuals by twelve percent.
Low interest advantage when buying a car
Private individuals also benefit from the currently very low interest rates when buying a car. When buying a car in cash directly in the dealership often come again rich discounts. When requesting a car loan next to banks, the car dealers themselves as providers in question. Therefore, a thorough comparison of the providers and their conditions makes sense here. Car buyers are advised not to mention, at the dealership, that they want to finance the car. It may be better to first know the conditions for buying a car including a discount and then to focus on the search for a suitable loan with the total amount in mind.
Several credit models possible
Under certain circumstances, different types of loans may be considered, for example three-way funding. This is a combination of purchase and leasing. However, consumers should pay close attention to the individual conditions. With some offers in the dealership, for example, the final installment or the additional costs can be very high. A residual debt insurance can also lead to additional and often unnecessary costs.
Loans for barrier-free living
With increasing age, many people are thinking about making their home accessible and age-appropriate. Frequently, this requires extensive and often expensive remodeling and renovation work. There are low-interest loans and subsidies available from the state-owned KfW Bank. The bank has once again increased its funding. So it is possible to get a grant of at least ten percent. If the whole house is to be rebuilt, even subsidies of 12.5 percent are possible.
Anyone who wants to take out a loan from KfW for barrier-free and age-appropriate renovation measures can use this loan up to a loan amount of 50,000 euros at an effective annual interest rate of 0.75 percent. Older people also have the chance to receive this loan. A certain age is not one of the conditions for the loan. The demand for loans for burglary protection is currently high at KfW. Both loans can also be linked. KfW recently again increased its subsidies for loans for burglary protection. Nevertheless, it can also be useful for reconstruction and other renovation work around the house or your own apartment, first to find out about the various offers on the Internet and then select on the basis of a broad information base the appropriate loan.
Consumers want to borrow more for investment
The desire to borrow is unbroken among consumers in Germany. Especially consumer electronics or smartphones, which are often quite expensive, are often bought on credit. Especially young people often buy a new device that they want to keep up with the latest trend. These investments are being financed more and more on credit. These figures are based on the Consumer Loan Index (KKI) of the Banking Association, for which the Gesellschaft für Konsumforschung (GfK) carries out an investigation twice a year. GfK is examining consumers’ consumption and financing plans in Germany.
At present, the consumer credit index is at 118 points, indicating that demand for consumer credit will remain high in the coming twelve months. However, consumers are more likely to borrow on cars, furniture and kitchens than large household appliances. However, the trend is certainly to finance more consumer goods through a loan. One in three households regularly buys consumer goods through a loan. More than 98 percent of these loans are also properly repaid.
Debt rescheduling as an alternative to expensive loans
People in Germany raised loans totaling more than 56 billion euros last year. Among other things, they have financed consumer spending. Loans for new cars were added in the amount of ten billion euros, for used cars, it was even twelve billion euros. The Germans spent three billion euros on furniture, kitchens or household appliances. However, the statistic portal statista does not mention any use for loans worth a total of 1.7 billion euros.
Of these, half were not earmarked and needed in cash. This suggests that these loans may have been used for debt restructuring. Exact numbers are not there. However, people often borrow money to repay an expensive loan from another bank.
Rescheduling may be useful
Such a rescheduling can be quite useful, for example, if you go into his checking account often in the minus and must use the Dispo. A credit line is usually much more expensive than an installment loan. However, this only makes sense if you balance your account and do not want to go down again. Also, to replace a too expensive old loan, rescheduling can be useful in many cases.
When looking for a suitable debt rescheduling a comparison on the Internet can be helpful. For this, however, one should know the amount of his remaining debt. This can be read in the amortization schedule or ask the bank. For example, if you have some money on the high ropes, you can also use it to repay the old loan. This reduces the loan amount for the new loan. In addition, at many banks early repayment of a loan, a prepayment penalty is due. This amounts to a maximum of one percent of the remaining debt. However, if the term is less than a year, the borrower only has to raise a maximum of 0.5 percent of the remaining debt as prepayment penalty.
From this data can now calculate the loan amount for the rescheduling loan. After that, the borrower has to decide on a suitable term. This information can now be used for a credit comparison on the Internet and thus recognize whether a rescheduling really worthwhile.
Credit despite negative Private credit
The Private credit query is designed to protect consumers from the oft-cited debt trap and banks from not getting their money back. Nevertheless, in many cases the reason for a Private credit entry is far in the past and the personal situation has changed in the meantime. Although there are some offers on the internet for loans without Private credit, any reputable provider in Germany will do a Private credit query before approving a loan.
Consumers who want to take out a loan but fear a Private credit entry should first request a Private credit self-service, which is free once a year. This should then be checked well and checked for incorrect entries. If an entry is wrong, you can delete it at the Private credit.
You can also improve your scoring by canceling outdated credit cards and checking accounts. One should also be careful not to change the checking account too often and always meet his payment obligations on time. Balancing the dispos can also help to improve his scoring.
P2P loan as a loan of the future?
More and more online platforms allow prospective borrowers to opt for a P2P loan. This form of credit, where a loan is concluded between two private individuals and without a bank, may well be an alternative to a normal bank loan. The online platform on which the loan is offered acts as an intermediary. The lender also acts as a private investor and can hope for an attractive return from this loan option due to the currently very low interest rates.
A P2P loan can be applied for online. The statistics portal statista indicates that the total volume of P2P loans this year is 107 million euros and could increase further over the next few years. In Asia, the United States and the United Kingdom, this loan option is already well known and used by many people.
Loans for pensioners
Many banks are too risky to grant credit to people over the age of 60. However, they often reject credit inquiries with reference to a case-by-case assessment. However, seniors often have good conditions for a loan. They often own a house or a flat, their pension is a secure income and they are no longer threatened by unemployment.
Nevertheless, many banks reject credit for seniors. Today, however, older people are often fit and active until quite old age and would like to use a loan, for example, for a renovation or a new car, possibly not to use their savings that they have taken for the care of old age. According to the German Institute for old-age provision, the complaints of seniors who no longer want to accept no more, due to their age to get a loan.
Provide additional security
As additional collateral senior citizens can, for example, register a mortgage on their house in the land register or choose the shortest possible repayment term. Even if a spouse, who is still in the best case still in the professional life and has no negative Private credit entry, the credit takes up, this can be an advantage.
The so-called real estate creditworthiness guidelines directive, which has been in force since May, also supports senior citizens. The regulation stipulates that banks must no longer insist that a loan must be repaid until the end of statistical life expectancy. Instead, they must have a closer look at whether the potential borrower can repay the loan as per contract.
Banks in Europe relax lending standards
In the second quarter of 2018, European banks once again relaxed their lending standards. The European banks are regularly asked by the ECB about their guidelines on lending. The current survey involved 149 banks. Businesses and private borrowers are thus easier on loans. The banks cite lower economic and company-specific risks as a reason for easing their targets. The increased competition among banks also plays a role.
Banks in Germany, Spain and Italy in particular lowered their targets. However, banks in France and the Netherlands did not change their standards. However, the easing of German banks was only marginal. However, the banks also lowered their requirements for real estate and consumer loans. It is expected that in the coming months, the rules on lending will be relaxed by many banks again. In this case, the demand for credit by businesses and consumers could continue to rise.