Month: October 2018

Best-known Foundation: Online loans in the test

Young couple sitting on a sofa and researching together on the Internet

Online loans are the trend. According to the German Bankers Association, in 2015, already a quarter of the loan agreements were concluded on the Internet. 

Reason enough for Geofoundation to take a closer look at the offers on the internet. The conclusion is almost entirely positive.

Significantly more favorable conditions for online loans than in the branch

Significantly more favorable conditions for online loans than in the branch

Compared to the previous year, the proportion of online loans has risen by five percent. Consumers should probably have convinced the more favorable conditions compared to the offers of the branch banks, according to the assessment of the consumer protection organization. Some of the interest rates differ by more than three percentage points. And as determined by Geofoundation, the online providers generally keep their interest promises. Deviations are possible, however, if banks grant credits depending on their credit rating. In the test, however, these were in favor of the borrower: Due to good credit rating, the subjects were in some cases loan offers with a cheaper interest rate than stated on the website of the provider.

Geofoundation certifies good user guidance – with one exception

Also on the application for the online loans, the goods testers had little to suspend. Twenty of the 22 tested banks guide their customers straightforwardly and clearly through the loan application and provide them with all relevant information. However, one bank failed: Agibank provided information to the private credit credit agency, which had a negative effect on the Applicant’s private credit score. A credit check with the private credit is quite common, as well as learns the credit bureau from the bank, when a consumer at a bank conditions for a loan request. However, this so-called “request credit terms” has no influence on the credit rating of the consumer. However, Agibank sent another request to the credit agency, which had a negative impact on the creditworthiness of the customer.

Keep your eyes peeled for the remaining debt insurance

Some providers of online loans also had to take criticism because they tried to persuade the applicant to take out residual debt insurance through presettings. Such insurance may make sense for higher loan amounts, but for smaller loans it is often not necessary. Ultimately, the conclusion of such insurance should be a deliberate decision of the customer. For Agibank, IKD, Parabank and Camibank, however, the policy was already automatically selected in the application, so there is a possibility that borrowers may close it by mistake. The General Public Bank even made unsolicited offers with residual debt insurance.

Every second German would take out “career loans”

The Germans are ambitious: 83 percent of working people want to further improve their job opportunities. This is the result of the representative study “Career Requirements” of our bank. Many respondents want to continue their education, study or go abroad to gain work experience. But often lack of funds for the career surge. 46 percent would therefore be willing to take out a loan for further qualification.

At the top of the list of career aspirations are language courses. 29 percent would like to learn a new foreign language or refreshed to get ahead in the job. 26 percent have even higher goals: They want to start their own business or start their own business. 25 percent would like to go abroad to work there. An education, training or retraining wish 23 percent.

Frequently, career plans of this kind are not put into action because of the lack of money. Anyone who has already completed training or studies, shuns the cost of additional training, a second degree or coaching. Others flirt with a thesis for which they have to give up the job temporarily – but have no reserves to finance the livelihood during the doctoral period.

Lending for self-employment particularly in demand

Almost every second person is considering taking out a loan to achieve their career goals. If you ask the Germans what they would actually use the money for, the start of self-employment is clearly ahead. Eighteen percent of working people can imagine becoming entrepreneurs with the help of a loan. Eleven percent would use the loan to finance education, training or retraining.

Respondents aged 18 to 24 are particularly open to this possibility: 69 percent of them would be willing to realize their career aspirations with the help of a loan. Here, too, the first place is self-employment – 29 percent would take a loan for it. For 23 percent, a loan is eligible for study and 22 percent would finance a training or further education with a loan.

Continuing education boosts employer attractiveness

The desire to obtain further education is also reflected in the expectations that Germans have of their employers. 34 percent expect their company to provide or support training. Thus training as a selection criterion is on par with “above average payment”. However, respondents are even more important: good working atmosphere (67 percent), flexible working hours (49 percent), career opportunities (40 percent) and teamwork (35 percent).

For the group of 18-24 year olds, further education is even the third most important criterion when choosing an employer. 47 percent of young respondents expect their company to do so. More important for this age group are the good working atmosphere (74 percent) and career opportunities (64 percent).

For the study “Career Requirements” of credit bankive, 1,006 participants, ages 18 and up, were surveyed online. The results are weighted and representative of the German population over 18 years old. The survey was conducted by the market research institute  in the period from 3 to 5 September 2013.