Loans in October

Loans in October

Saxony takes the least loans

An Internet comparison portal came to the conclusion that the Saxons are lending the least money. Those responsible for savings banks and Volksbanks in the federal state of Saxony came to this conclusion. People from Saxony have made the fewest credit inquiries in the past twelve months and also received less money than people from other federal states.

The evaluation, however, referred exclusively to requests for installment loans on a credit comparison portal. Borrowers from Saarland and Rhineland-Palatinate received 15 percent more inquiries than the national average. The loan inquiries from Saxony, however, were 18 percent below the average of the entire Federal Republic. They ask on average a loan amount of 12,877 euros. Potential borrowers from Baden-Württemberg and Bavaria asked the highest sums. The loan inquiries from these two federal states, however, were also comparatively low overall. Other evaluations have already yielded similar results.

Companies received more loans in September

The monetary policy of the European Central Bank arrives at companies in the Eurozone. The ECB’s low interest rates, as well as the bond-buying program due to expire at the end of the year, are expected to encourage banks across Europe to lend more. In September, 4.3 percent more loans were granted to companies than in September 2017, according to figures released by the ECB. Already in August, 4.1 percent more loans were granted to companies than in the same period of the previous year. The number of loans granted to households increased by 3.1 percent. Also in August, the increase was at this level.

The figures also show that many banks in Europe have once again eased their lending policies in recent weeks. The good economy also played a role here. An exception is only France. The local banks have not changed their lending rules in recent weeks.

Demand for loans also rose

The ECB’s figures also show that demand for corporate, consumer and real estate loans was higher in the third quarter of 2018 than in the previous quarter. One of the reasons for this, according to the ECB, is that interest rates are still very low. Demand for these types of loans was also very high in the quarters before.

The ECB is of the opinion that bank lending requirements will hardly change in the fourth quarter of the year. The ECB conducts the Bank Lending Survey four times a year among banks in the euro area. The current survey involved 147 banks from across Europe.

Are P2P loans an alternative?

P2P loans are no longer an insider tip. The awareness of this form of credit continues to increase. Every month, many people find out about this still very young type of loan online, which is provided via special online portals. A peer-to-peer loan brings private investors and companies together. Some online credit comparison sites have included P2P loans in their overview.

The processing of these loans is often faster than with traditional bank loans. Often, 24 hours after borrowing, the loan is paid out to the borrower’s account. The group of people with opportunities for such a P2P loan is often larger than with traditional loans. In the case of the latter, for example, students, the self-employed or retirees often find it difficult to obtain a loan.

Credit check is carried out

Nevertheless, a credit check is also carried out on P2p loans. However, their rules are often not as strict as with banks. Although similar aspects are examined, their weighting is often different. Borrowers who have had a Private credit entry in the past, but can now demonstrate a good payment history, for example, here have a good chance of a loan. There are also similar requirements as with other types of credit, for example the age of majority and the main place of residence in Germany.

Borrowers thinking about a P2P loan should also compare the offers well. A comparison to traditional bank loans is also usually useful. The goal should be flexible financing with low interest rates. The cost of a P2P loan depends on the creditworthiness of the borrower. If you have a rather bad credit rating, you often pay higher interest rates.

Rescheduling makes sense in many cases

In Germany, the creditworthiness of the potential borrower is checked for each loan application. Therefore, good credit is a prerequisite for every form of credit. On the credit rating, it also has a negative effect, if someone already has to repay several loans. In this case, a debt rescheduling loan may be useful. This can then also contribute to improving the credit rating.

Frequently, borrowers still pay relatively high interest rates on their old loans. In the current period of low interest rates, it may therefore be worth considering replacing these expensive old loans with a debt rescheduling loan. The borrower can thus pay off his loans faster in many cases. Loans with multiple loans can thus bundle their obligations and get a better overview of their payment obligations. In the search for a suitable debt rescheduling also help comparison portals on the Internet.

Real estate loans still with favorable interest rates

Interest rates on long-term real estate loans have gone down again in recent months. Real estate loans are currently as cheap as they have been since January 2018. If one had to raise two percent interest on a real estate loan in August, it was only 1.76 percent in September. This interest rate applies to real estate loans with a term of 15 years. Anyone who takes out a real estate loan with a term of only ten years, currently pays only 1.33 percent interest.

The European Central Bank expects real estate loan rates to remain low over the coming months. The ECB is currently signaling that it may start raising interest rates from autumn 2019 onwards. As a result, interest rates could rise again for the first time in years. In the short term, however, real estate loans are not expected to rise in interest rates.

Installment credits often for cars

According to the banking association, more than 50 percent of all installment loans are earmarked for the purchase of a new car. In the ranking of uses then installment loans for furniture and electronics. 17 percent of all installment loans are used for these goods. Car buyers often take out a loan, especially for a new car. 31 percent of all completed installment loans are earmarked for the purchase of a new car. The loan amount taken amounts to an average of 19,000 euros. Just behind it are loans for used cars. 28 percent of all installment loans are planned for this purpose. The loan amount here is on average 11,000 euros.

Comparison is worthwhile

Even with car loans worth a thorough comparison, because the conditions are often very different. In addition, car buyers can make loans directly in the dealership, online or at their house bank. The number of eligible providers is thus very large. In order to benefit from discounts when buying a car, it may be useful when buying a car to first learn the total including all discounts and start with this sum in mind then a detailed search for the cheapest loan.

The forms of financing vary as well. Among other things, there are leasing offers and balloon financing. Balloon financing is often associated with high fees and special repayments are not possible in many cases. Often, borrowers are advised to choose financing that will allow them to be as flexible as possible. The change in the rate should be as possible as a special repayment.

Are interest rates low?

Interest rates in Europe have been at a very low level for several years now. Since March 2016, the ECB has kept its key interest rate at zero percent. The deposit rate for banks is even minus 0.40 percent. Added to this are bond purchases by the central bank, which are to be continued until the end of the year. The ECB’s actions aim to support the eurozone economy.

Companies should get more easily on loans and thus have the opportunity to invest larger sums of money (also interesting: Compeon experiences ). This creates new jobs as a result. Private individuals also receive loans on favorable terms. By contrast, savers receive hardly any interest, for example on overnight money accounts. Individuals should also be encouraged to invest in this way. For example, real estate loans are currently very cheap. Also on this way the economy should receive a boost. In the short term, the situation should not change. Only from autumn 2019 could the ECB initiate the turnaround. Then it can then gradually come to higher interest rates.

Interest on consumer loans low

Even with consumer loans, borrowers can look forward to low interest rates. Some credit comparison portals even work with negative interest rates, but usually for loans with small loan amounts up to 1,000 euros. Here customers do not have to repay the full loan amount and can save some Euros in this way. Anyone who wants to take out a loan and makes a loan comparison on the Internet will find that many providers currently offer very favorable terms.

FMH Finanzberatung recently compared several loan offers. It examined credit-based loans for customers with a very good credit rating and credit-independent loans. In the latter case, the borrower pays a fixed interest rate and thus has good control over his monthly installments.

However, such loans are not given by banks to all customers. Credit-based loans are awarded far more frequently. However, customers with a lower credit rating generally pay higher interest rates than customers with top credit ratings. Customers with a good credit rating usually have a very good selection of particularly favorable offers. However, the cost of a loan is also determined by the duration and the amount borrowed.

Low monthly rates often mean longer term

If you want to pay a very low monthly rate, you should opt for a long term. However, this can be shortened by special repayments. For example, if there is money left over at run time after a tax refund, you can put it into the repayment of your loan.

An installment loan can also be helpful in overcoming a short-term financial bottleneck. The terms for a installment loan are often more advantageous than for credit facilities. An installment loan can therefore also be used to pay off an expensive credit line. FMH Financial Advisers came to the conclusion that bank customers currently have to pay an average of 9.28 percent interest when overdrawn.

Decision for an installment loan

Anyone who thinks about taking up a installment loan should first think about the amount of credit needed. One should also consider which sum is most compatible with one’s own financial situation. Then the term becomes the topic. From interest and duration then the amount of the monthly rate. For a short term, the monthly rate is usually higher. Those who opt for a longer term, but takes a higher interest charge in purchase.

Many borrowers already have to pay off other loans. Therefore, it may be useful to bundle these into a loan. This gives you a better overview and simplifies the repayment. In addition, a new loan in the current low-interest-rate phase can prove to be a decisive advantage.

Credit rating important for interest calculation

The amount of interest on a loan is usually determined by the creditworthiness of the borrower. Therefore, it may be useful to take some steps before borrowing. Among other things, every citizen can receive free self-assessment once a year at the Private credit. Here you will learn his Private credit score. A contribution to improving this rating may be to cancel bank accounts and credit cards that are no longer needed, as these will also be listed at Private credit.

Incidentally, it also has a negative impact on the Private credit rating, if you make several loan requests. Therefore, a comparison of different loans via an online comparison portal is also useful for this reason. This is not included in the Private credit rating. In addition, the credit conditions here are often even cheaper than at banks on the ground.

Purpose can influence conditions

The purpose can also play a role in the loan terms. Who wants to buy a new car and wants to take a installment loan, should specify this in the loan application. Banks then value the new car as collateral in this case. So lower costs may be possible. The conclusion of a loan can be revoked within 14 days. This deadline was set by the legislator. However, some banks even offer a 30-day right of withdrawal. Special repayments can also help to terminate a loan early.

Miriam Lee

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