Online installment loan comparisons always show two interest rates per bank, the lowest and the highest the bank offers. How your personal loan interest will ultimately end up depends on a variety of factors, including maturity, loan amount and your personal creditworthiness.
Representative calculation example makes quotes more comparable
The legislator envisages a sample calculation for the installment loan comparison, which gives information about the loan costs and the annual percentage rate that two-thirds of the customers received from the bank in the past. An example of a representative calculation can be found directly below the quotes in gray font. The sample calculation is based on the values you entered in the installment loan comparison.
The following terms are important for your understanding of the sample calculation and the so-called two-thirds interest rate:
Net loan amount: The amount you want to borrow from the bank.
Unlike interest on debt, APR includes all the additional costs incurred when issuing an installment loan.
Borrowing interest: Borrowing interest is the interest that the bank gives you a loan in installments. Additional costs such as lending fees, credit (discount) or redemption rate are not yet included here. Debt interest is the pure net interest rate. Therefore, it is not possible to make an objective comparison based on the debt ratio.
Transaction fees: The proxy calculation example also shows that no transaction fees are charged for the installment loan.
Monthly installment: This amount shows how many customers on average have to repay the bank per month to close the loan in the desired term.
Total amount: This amount corresponds to the total loan costs you have to pay when taking the installment loan, ie the net loan amount, the effective annual interest rate and the special services such as remaining debt insurance. The total amount reflects the amount you actually have to repay the bank and therefore offers the best reference point for installment loan comparison.
Why can the intended use lower the cost of borrowing?
There are different types of installment loans. The classic installment loan is purposeless and the borrowed money can be used as desired. Dedicated loans, such as a vehicle loan or construction finance, can only be used to purchase the agreed product. As a rule, the allocated loans are cheaper, because the purchased product acts as collateral for the bank in case of a payment default.
If your loan request is about money for car financing, rescheduling or purchasing for your own four walls, you should state the purpose in our installment loan comparison to take advantage of cheap installment loans. However, when taking a loan for a new laptop, TV or smartphone, you can do without specifying the purpose of use, as a rule, you will not receive lower interest rates for the purchase of consumer goods.
The loan amount also affects the interest rate.
In addition to the purpose of use, the loan amount also affects the interest amount. The following applies: the higher the loan amount, the higher the loan interest. If you are looking to modernize, renovate or expand your own property, we recommend taking out a loan of €50,000 or more through our mortgage loan comparison. Here you have low interest rates, long terms and special repayment options even with high loan amounts.