Month: November 2018

Credit Loan: Avoid High Costs

Anyone who lives permanently in the Dispo pays high interest and is under stress. So it makes sense to balance the credit line as quickly as possible. 

This can be worth a installment loan: your account balance is immediately out of the target and the interest rates are significantly lower than the Dispo.

Checking account overdrawn – what now?

Checking account overdrawn - what now?

The Dispo (short for disposition credit ) allows to cover the current account. This can be very useful in different situations, for example when an urgent purchase is necessary and the salary has not yet been credited. But with the credit line caution is advised: Who does not compensate him quickly, but always strained, can fall into a debt trap. The disbursement rates are particularly high and can be three to four times the interest on a installment loan. So the checking account is slipping further and further into the minus. A possible step would be to make savings available and thus to balance the MRP. But often this is not possible – otherwise the account would not have been overdrawn in many cases.

Debt credit balance with a installment loan

Debt credit balance with a installment loan

An easy alternative to get out of the red is to take out a installment loan. You can use the total to directly clear the credit line. It is best to choose a sum that is slightly higher than the amount by which you have overdrawn the checking account. This will help you to avoid falling again immediately. As a result, you pay back the loan in manageable monthly installments. The interest costs are significantly lower than if the collection is used permanently. For example, our bank’s instant loan can be quickly and easily applied for and is available within a short time.

Long-term goal: life without discretionary credit

Long-term goal: life without discretionary credit

There are several measures you can take to avoid recourse soon. Ideally, you will find a way to increase your earnings, for example, through a salary increase or a side job. But easier said than done – in many cases this is not so easy.

Then it says: Reduce spending. A household book can help you keep an eye on your expenses. Often the monthly fixed costs can be reduced by canceling superfluous contracts. Even a change to a checking account with better conditions can make sense: With a free account you save money every month and lower interest rates are an advantage in case you have to cover again.

What do the Germans take out loans for?

Woman with glasses and hat in front of a painted wall

The Germans are currently more willing to take out loans to fulfill their wishes or make important purchases. But what exactly do you finance with a loan? 

In times of low interest rates, it is known to be particularly beneficial to finance larger purchases with a loan. This is also reflected in the consumer credit index, which the Duresearch institute (DI) calculates twice a year for the banking sector association. It is currently at 129 points, the highest since its launch five years ago.

The index is composed of the acquisition planning and the financing planning of the respondents. Overall, in its representative study, DI surveyed 1,904 people as to which major acquisitions they are planning in the next twelve months and whether they would like to finance them through a loan. The result: With the acquisitions a stable development is to be expected, the financing readiness is even slightly rising. The favorable lending rates are making themselves felt and more and more consumers can imagine this form of financing.

Cliché of the darling child of the Germans at least applies for loans

Many respondents are willing to finance a new car through a loan : 48 percent can imagine that for a new car, 37 percent for a used car. This makes car buying the most frequently used purpose for a loan. However, only four percent (new cars) and seven percent (used cars) of German citizens are planning this large acquisition for the coming year. It is striking that the readiness for financing in used cars has risen significantly more sharply compared to the previous year than for new cars.

Home sweet home, luck alone: ​​Renovation and furniture increase

In third place are furniture and kitchens when it comes to the willingness to borrow. 19 percent want to set themselves up with a loan. Even for a renovation or a move, nine percent can imagine using a loan. In these two areas, financing planning has risen sharply, so especially many Germans are currently willing to provide a home loan for a comfortable living. For purchases in the field of consumer electronics, significantly more consumers are now willing to take out a loan than last year.

On holiday, the Germans are stuffy

A larger holiday is a potential use for a loan only for two percent of respondents. Although the willingness to finance has risen slightly, it is still the area where very few consumers choose to take out a loan. Although 26 percent of respondents plan a larger holiday in the coming year, but this is ironically spared in most cases. According to a study by the bank, holiday travel is the most frequent savings target for Germans.

Unexpectedly, apparently also comes with larger purchases often

Asked by opinion pollsters if they plan to make larger purchases in the next 12 months, 48 ​​percent said yes. More than half of the respondents are therefore not expecting more spending in the coming year. A look back, however, shows that things often turn out differently than expected: in relation to the past twelve months, 61 percent said they had made larger purchases. Especially with large household appliances, a significant part of the purchases are unplanned: Almost half of the respondents said they spontaneously bought household appliances. After all, it is seldom possible to predict when, for example, the washing machine will give up the ghost and have to be replaced. It is to be expected that the actual purchases and thus also the taking out of loans will ultimately be higher than the consumer credit index suggests.


Germans exemplary in loan repayment

The figures of the private credit give the Germans a good testimonial when it comes to the repayment of loans. 

In addition to the reliable loan repayment, the borrowed loan amounts rise and the terms of the loans are getting longer and longer.

Credit repayment usually runs smoothly

The current credit compass of the credit agency private credit provides pleasing information about the payment behavior of the Germans: 97.8 percent of the loans were repaid in 2016 without any problems. This is the highest value in ten years and represents an increase of 0.2 percent over the previous year. Even young borrowers prove to be very reliable in the loan repayment: Among the 18 to 19-year-olds, the repayment rate of 98.1 percent is even higher than the national average. Given the good payment behavior private credit has saved over 90.7 percent of German consumers only positive features.

Higher credit sums and longer terms

Higher credit sums and longer terms

The sums borrowed by the Germans have increased in recent years: in 2016, 36.6 percent of all borrowers chose a loan amount of 10,000 euros or more. This share was 34.5 percent in 2015 and 31.2 percent in 2014. The loan amounts also increase the maturity of loans taken: the average maturity was 48.6 months last year, an increase of one month over the previous year and a new high of ten years.

Credit comparisons are becoming more frequent

Credit comparisons are becoming more frequent

The number of Germans who obtain information about the terms and conditions of various banks before borrowing increases. In 2016, the private credit recorded 22.9 million condition requests. Compared with 2015, this represents an increase of 17 percent. With such a request for a condition the banks inform themselves at the private credit about the creditworthiness of a potential borrower. The result affects the conditions at which the applicant is offered a loan. Unlike concrete loan requests, condition requests are only stored for a short time at the credit agency and have no effect on the private credit score of the consumer. However, the number of loans raised in 2015 and 2016 was 7.7 million. So the Germans like to get several offers in advance, before they finally decide on a bank.