Chep Money and Cheap Loans
The interest on loans has been in the basement for quite some time and recently there is even the first loan , in which one pays back less than you get. The reason for this, from the consumer’s point of view excellent credit market situation, is the fact that even the banks can obtain cheap money from the European Central Bank. This cheap money is then brought in the form of interest-free loans “to the man and / or the woman”. Anyone who accesses installment loans or mortgages to finance long-held wishes is undoubtedly profiting from those historically low interest rates. Banks would therefore have every reason to adjust the interest level of their loan offers according to their own possibilities of the current situation – in as transparent as possible. But that does not happen. Because with a type of credit, which enjoys a high popularity among consumers because of its simplicity, neither the interest nor the conditions are transparent. The speech is from the credit line .
Zinnief pulls past the credit line
Anyone looking at the market for out-of-pocket loans quickly realizes that the interest rates for a credit line have changed virtually nothing compared to an installment loan. The nationwide interest rate for a credit line is still around 10 percent and has moved in the 2-3 years just behind the decimal point. On top of that, banks often do not even feel compelled to communicate the interest rate on the disposition loan they offer in a reasonably transparent manner. And this despite appropriate reminder from the policy in this case to put a greater transparency on the day. But that keeps the institutes very different. From this it follows that, as already mentioned, it is often not really clear how the dispossession of some financial institutions actually comes about.
Interest level for the credit line almost unchanged
After all, German consumers pay around 9.78 percent interest effectively per annum for a used credit line. If one compares this value with that of the previous year, it can be stated that the interest rate moves down by just 0.13%. Determined by a comparison of the conditions of a total of 1,433 banks. In view of the general interest rate situation on the German credit market an almost ridiculous development. What is particularly striking in the context of the evaluation is the fact that, in particular, regionally active financial institutions estimate a particularly high interest rate on their credit facilities. In terms of figures, the majority of regionally active banks averaged around 13% a year on average for an out-of-pocket loan, with direct banks often well below the 10% mark.
Transparency in costs for the credit line is heavily dependent on the bank
First of all, even if there has been little change in interest rates overall, it has become much clearer for bank customers compared to recent years how the bank’s current disbursement rates come about. The reason for this is the Payment Accounts Act, which came into force in 2016. On the basis of this law, financial institutions are required to clearly, unambiguously and conspicuously disclose the amount of interest on the Internet. But what is fixed on paper does not necessarily mean complete implementation in practice. An independently conducted test by a renowned financial magazine revealed the following:
- For five of the institutions examined, the interest rate for the testers was not apparent at all . For others, the dispots were under key words such as “residential real estate credit policy checking account” or “Wunschkredit”. For a bank, the interest rate for the credit line is only communicated on the online presence.
- Some banks seem to map the level of their discretionary interest according to the pattern “reference interest rate plus mark-up of x percent “. As a result, the bank retains a “flexibility” that is not immediately apparent to the customer in the interest calculation.
- For others, the disbursement depends on the creditworthiness of the customers . The worse the credit score, the higher the interest rate.
- Another way of getting around one’s own determination: Some banks will no longer lower their disbursements as soon as the reference interest rate falls into negative territory.
- The fact that even if the reference interest rate is negative the disparities can still increase is shown by the case of a regional bank, for example. This had since the last investigation increased their dispensation by almost two percent, in which they simply changed the corresponding clause . From the premium of eight percent on the reference interest rate was unceremoniously ten percent.