Discover top-tier installment loans at your fingertips.
People who apply for loans with flexible interest rates not based on their credit score at a bank can relax, knowing their interest rate upfront. This gives them planning certainty right from the start, under favorable terms.
Following the European Central Bank's reduction of benchmark interest rates at the start of the month, one would expect installment loan interest rates to follow suit. However, as usual, it's taking longer for these rates to drop.
Many loan applicants struggle to get straightforward interest rate information. Even those who visit a bank or savings institution directly, or search for a lender online under pressure, typically only receive loan offers with a catch - installment loans "starting at 0.68 percent" or terms "based on credit score."
The best interest rate is mentioned, but in reality, only about five percent of credit applicants actually get it, with extreme cases seeing an interest rate of 17.87% instead of the advertised 0.68%. Advertisements often conceal this information.
Clear interest rates also exist for loans independent of credit score
A recent study by FMH Financial Consulting, commissioned by ntv, shows that it doesn't always have to be like this. The researchers conducted a market analysis to identify banks that still provide clear interest rate offers, rather than pegging them to the credit score assessment. Such offers offer several advantages for customers: firstly, they receive a clear yes or no to their loan application. Secondly, they know at the time of application what monthly expenses they would incur if the loan were approved.
The top providers in this evaluation with clear installment loan interest rates are the nationwide providers Deutsche Skatbank, PSD Bank West, and Ethik Bank, as well as the regional PSD Bank Munich: For instance, a borrower needing 15,000 euros and planning to repay it over 60 months would pay 284 euros to the most favorable provider and 300 euros to the most expensive of the unfortunately limited eleven providers.
As a comparison: With installment loans of the same amount and the same term, the bank would have advertised with a rate "starting at 254 euros." The customer might have ended up paying significantly more monthly in the end.
A current installment loan comparison featuring both credit score-dependent and -independent installment loans can be found at the ntv comparison calculators.
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Consumers seeking transparent interest rates for their installment loans can benefit from banks like Deutsche Skatbank, PSD Bank West, and Ethik Bank, which offer clear rate offers independent of credit scores. Overdraft interest rates can vary significantly, but banks with clear interest rate policies can provide consumers with planning certainty. If you're unclear about your personal loan terms, it may be worth consulting with a financial advisor to understand the true costs. Private debts can accumulate quickly, and understanding your lending agreements is crucial for financial management. Banks should prioritize consumer protection by providing clear and transparent interest rate information for all types of loans.
