The global financial and economic crisis has badly affected banks
In Germany more and more institutions are fighting for their existence. The problem: Traditional business sectors, such as investment banking, securities trading and mortgage finance, have plummeted. As a result, the money markets are once again focusing more intensively on the private customer business and are greatly expanding their margins with high interest rates. Both installments and discretionary loans are affected by interest rate increases. The interest rate cuts of the European Savings Bank will not be passed on to the consumer the financial shortage of the banks is too great.
In the current market environment, conscientious comparison of the terms and conditions of different banks is particularly important, according to consumer insiders. The interest rates sometimes differ significantly. If you act prudently and look for the right loan, you can save a lot. For example, a disposition credit taken at Commercia bank currently costs 14.73 percent interest a year. Anyone who permanently uses their credit line on such terms incurs high costs. It is better in such a situation to replace the discretionary loan with another loan.
Favorable banks currently require 4.9% interest
From all borrowers and regardless of their credit rating for installment loans up to 5,000 euros with a maximum term of three years. If you do not want to pay monthly installments, you can get your financial leeway with framework loans or call-off loans – loans that are very similar to discretionary loans – and only pay slightly more than half as much interest as with Commercia bank.
Many banks are offering borrowers to take out a residual debt insurance when taking out their loan versteht for a fee. The policy insures against death, incapacity or unemployment. What seems sensible at first glance turns out to be a cost trap in many cases: taking account of insurance costs, interest rates often amount to 20 percent and more a year.
When the financial crisis is over, loans will become cheaper again – at least that’s where consumer advocates go out. They see the competition among the German banks intact and therefore expect that the risk premiums will decline again when the financial difficulties of the banks settle. Until then, keep your eyes open when borrowing!