Better protection for borrowers

 

Borrowers should be better protected in the future against intransparente costs.

Borrowers should be better protected in the future against intransparente costs.

A draft law of the Federal Government stipulates that in the future, banks must explicitly state all costs of a loan. In particular, policy makers want to protect consumers against loss-seeking offers that advertise with a seemingly favorable interest rate and contain hidden costs. In the case of perpetual loans, no notice period of more than one month should be possible in the future. Borrowers can then repay their commitment at any time without incurring any costs. In the case of fixed-term loans, early repayment should be possible at any time according to the will of the legislator, whereby a pre-emptive claim of a maximum of one percent may be levied on the prematurely repaid amount.

Regardless of how the bill will be reflected in future banking offerings

Regardless of how the bill will be reflected in future banking offerings

Consumers can best protect themselves by looking closely at each offer. Many banks advertise with very low interest rates. However, the favorable conditions do not apply to every borrower on a flat-rate basis and are based on the applicant’s creditworthiness. The better this completes, the lower the interest rate for the loan. It is therefore often not possible to determine the exact terms of a loan before an individual check. However, credit intermediaries who work with a large number of banks can assess in advance which bank an applicant suits best and thus help to realize the most favorable loan interest rate possible.

Experts suggest that when looking for a loan to make sure that the structure of the loan fits your needs. If, for example, the discretionary credit is to be repaid due to its very high interest rates, in many cases a credit line loan is better suited than a classic annuity loan, since in the latter case the repayment installments increase the monthly burden immediately after the disbursement, w In the case of a credit line in the most favorable case as for the repayment credit, only the interest on the amount drawn must be paid.