Everywhere the banks advertise their loans. The term credit-independent installment loan is always striking. But what exactly is behind this catchphrase?
Pay attention to the fine print when advertising
The banks promise a lot in their advertising. But many, for example, do not pay attention to the asterisk behind the number when it comes to interest rates. But that is exactly what it is about, because the interest rate mostly depends on the creditworthiness of the loan seeker and can therefore increase significantly.
Very few borrowers get the advertised interest rate. The credit-independent installment loan looks different, here the interest is not influenced by the creditworthiness of the borrower, but is based solely on the loan amount and its term.
The longer the term, the higher the interest
Many want a longer term to pay off the loan. That is possible, but banks can pay for it in the form of higher interest rates. The advantage of this is that the rate is kept low. For people who do not have such a large income, this is the safest option, even if it is more expensive.
However, an installment loan that is independent of creditworthiness does not mean that the creditworthiness of the loan seeker is not checked beforehand. As with other forms of loan, the Credit Bureau is very much inquired here. The result of this query does not determine the amount of the interest, but whether the loan is approved or not.
Beware of overconfidence
Sometimes you should refrain from taking out a loan. There is nothing worse than fulfilling consumer desires with a loan that cannot be paid off afterwards. If the salary is sufficient, there is nothing standing in the way of a loan. However, mistakes are still made far too often, because most of them still use their house bank as a contact point for a loan request.
But that can be expensive. The banks all advertise with their low interest rates, but real savings can only be found with the online banks. Unfortunately, many borrowers still pay too much because they haven’t compared offers.