In the past five years, about two-thirds of all Internet users have taken at least one consumer credit. This results from an on-line survey of market guard finances of the consumer center Saxony. It became clear that overdrafts are the most widely used form of credit. The providers offer numerous forms of consumer credit. These range from installment payments for electrical appliances over a car loan to the dispoarding of the current account.
These consumer loans are not only broad but also widespread. In the survey, Internet users aged 18 and over were asked about their credit habits. Nearly two-thirds said they had used at least some form of consumer credit over the last five years.
More and more loans in Germany
The credit compass of the Private credit also comes to similar conclusions, from which it can be seen that people in Germany are increasingly taking out loans. In addition, many people use loans to bridge short-term financial bottlenecks. Here, the discretionary credit, although associated with high interest rates, one of the most widely used variants. 29 percent of those surveyed use this type of credit, followed soon after by the credit line. The survey also concludes that, despite many online offers, many consumers still prefer to go to the bank branch to get a loan. Also, the conclusion of a loan in the dealership or in specialty stores is common.
Consumers use online comparison portals
The survey also found that many customers compare different offers before taking out a loan. 80 percent of respondents prefer relevant online portals. Bank websites as well as personal advice at the bank are also used as a source of information. However, Market Watchdogs Finance of the Consumer Center Saxony comes to the conclusion that in practice only a third to half of the surveyed borrowers indeed compared an alternative offer.
Consumers satisfied with their credit
Nevertheless, the majority of respondents were satisfied with the chosen funding. Only five percent of respondents complained about repayment problems. However, with every tithing in a rescheduling to problems such as placement and termination fees. One quarter of the respondents already used debt rescheduling or chain loans. The goal was often to lower the monthly rate, change the term or use a better interest rate.
Low interest rate phase: Debt trap for borrowers?
According to the credit compass of the Private credit, the Germans are in a consumer mood. They are also willing to take money for purchases and finance them through loans. This raises the question of whether the low-interest phase represents a danger that people fall into the debt trap. Private credit CEO Michael Freytag, however, said at the presentation of the credit compass that consumers in Germany, despite low interest rates, their finances under control and would be “by eye” debt.
According to the Private credit, 4.4 percent more consumer loans were concluded in 2017 than in the previous year. In total, it was more than eight million for the first time. On average, Germans raised more than € 10,000 per loan. Particularly often installment loans for cars, furniture or electrical appliances were completed. As in the previous year, more than 97 percent of all consumers paid back their loans smoothly.
A credit comparison can make sense to save money
Reliability in repayments
Michael F. therefore believes that consumers in Germany are very reliable in repaying their loans. However, illnesses, job losses or divorces are reasons for late payments. According to the Private credit, at the end of 2017 a total of almost 18 million installment credits were recorded in their data. This was 3.5 percent more than in the previous year.
The Private credit assumes that the number of consumer loans will continue to increase. This is also related to demographic factors, as today even 70-year-olds take out a loan. Stable economic growth, low unemployment and comparatively low inflation also have a positive impact on private consumption. From the data of the Private credit also shows that the Germans still prefer shopping on the Internet when shopping on the Internet.
Who pays the lowest interest?
According to an online comparison portal, engineers and architects are paying the lowest interest rates on consumer credit. Generally speaking, the more you earn, the cheaper the conditions are. Employees from the catering trade have to live with the worst conditions. While high-income occupational groups paid 3.15 percent interest on average, other occupations had to pay significantly more. For gastronomy employees, the interest rate was significantly higher at 4.4 percent.
Different occupational groups examined
In the evaluation, a wide variety of professional groups were taken into account. Even those who work in the IT sector, at banks or in the auto industry can look forward to low interest rates. In addition to catering, employees in the retail trade, in passenger transport or in the food industry also had to pay high interest. The evaluation came to the possibly somewhat surprising result that doctors also have to pay relatively high interest rates.
In addition to income, factors such as home ownership or other current loans also play a role in calculating the interest rate. The conditions always depend on an individual examination.
Can car buyers cancel their loan?
Can car buyers revoke their loan or lease contract due to flaws in their loan agreements? This question could currently be interesting, especially for people who bought a diesel car. More and more car companies are affected by the diesel scandal. The value of the cars affected decreases. But can car buyers resist? One way is to revoke his car loan. Even if no manipulations are detected, it is still clear that diesel vehicles have lost massive value. Other disadvantages for diesel owners may possibly be driving bans in many German cities.
Do not carry yourself loss of value for diesel
Diesel owners do not have to carry this loss of value themselves. A backdoor here offer flaws in many loan agreements. There have already been several court judgments and out-of-court procedures that show that this path can be successful. Lawyers of the interest group revocation have now discovered in loan agreements of Opel Bank form errors that allow a revocation. An example of this is a calculation method for the prepayment penalty. This is not specified as required. The lawyers also found in several contracts, no indication of what conditions the borrower can repay the loan and what interest he has to pay.
Form errors can make withdrawal successful
These errors can increase the chance that a revocation will succeed. With the revocation of such a credit agreement, the car purchase itself is invalid and must therefore be reversed. The bank and thus also the car manufacturer must take back the car and refund the purchase price. The consumer usually pays a relatively small compensation because the car was needed. However, this sum is currently significantly lower for diesel cars than the loss in value.
Fewer students take credit
Students at German universities receive less credit. For some years, the numbers of student loans decline. Currently, only about 100,000 students use a loan. With 2.7 million enrolled students, this is only 3.5 percent. This is the conclusion of the Student Loan Test of the Center for Higher Education Development (CHE), which is published annually. In 2013, 35,000 students completed a loan. Last year there were only 23,000.
Two government providers are popular
A large part of the student loans comes from the two state providers, the Intrasavings bank banking group and the Federal Office of Administration, which offers an education loan for students. Intrasavings bank enables students to record up to € 650 a month. The Federal Office of Administration could turn to students who are in higher semesters. There they can receive up to 300 euros per month for up to two years.
Conditions are different
The costs are quite different. Intrasavings bank demands a comparatively high interest rate with 3.55 percent. The Federal Office of Administration calculates only 0.72 percent. Some providers with very high interest rates have meanwhile withdrawn their offers from the market. Individual Studentenwerke even offers interest-free offers.
Students should check whether the interest rate for the repayment phase is already established before taking out a student loan. For some providers, this is agreed after the end of the study. At Intrasavings bank, for example, it is possible to set a fixed interest rate directly.
Race for negative interest
With two Internet portals for comparing loans, consumers can now again use offers with a negative interest rate of five percent. For example, if you borrow 1,000 euros, you only have to repay 947 euros. At present, competition among credit providers seems to be starting to return to negative interest rates. This was already the case in February and May. The goal is certainly also to address new customers. Since there are now numerous online comparison portals, some providers also offer attractive campaigns for their customers. With a reputable comparison portal, these could be very interesting for borrowers.
Effective annual interest rate lowered
Also, smava lowers the effective annual interest rate for its cheapest installment loan from minus 0.4 to minus five percent. The company is also generous with its credit standards. Additional costs do not arise. In addition, the offer is available to customers for free use. A early repayment is possible for free.
How do the online credit intermediaries work?
Local branches for online credit intermediaries?
Could local branches make sense for online credit intermediaries? The online loan broker kredit.de plans to build a local branch network in the next few years. The company sees a lot of potential in personal advice. More and more people have begun to handle their banking business over the Internet in recent years. For banks, digitization also brings with it advantages and significantly reduces costs. As more and more administration is required, the costs are increasing. Some banks have therefore been forced to branch closures, especially in rural areas.
Provider wants to work offline
Kredit.de now wants to go another way and offer his online business offline. The background is probably that many loan agreements are still closed in bank branch or specialist shops on the spot, although online offers are often much cheaper. In addition, the comparison of individual offers on the Internet is much easier.
Since it is known from studies that many Germans have little knowledge in financial matters, kredit.de would like to offer the opportunity to ask these questions directly on site. The first branch opens in August in Hameln in Lower Saxony. Then Dresden should follow. The company wants to open branches in as many locations as possible in the coming years.
How do credit comparison portals work?
There are now numerous comparison portals for loans on the Internet. In part, it is worthwhile to inquire about a loan on several comparison portals. The competition is meanwhile very big. Therefore, more and more providers are also offering special promotions for their customers. For example, customers can save money by repaying their loans with smava’s down payment. Many credit providers often place very cheap loan offers on these portals. Customers thus often receive significantly better conditions than at their house bank. However, even such a comparison portal can never completely map the entire market. There are now so many loan offers on the market that a complete overview is difficult. Nevertheless, they are a good decision-making tool for many customers and usually provide a very comprehensive overview.
Find reputable loans
However, investors should be careful to only use reputable comparison portals. But how do you know if a loan or a comparison portal is dubious? As a rule, credit intermediaries do not lend themselves, but merely broker them. In addition, there is an indication that a bid may be dubious if no collateral or credit checks are required. In Germany, it is absolutely normal for a bank to demand collateral and check that the potential borrower is solvent. It is also unserious if a provider requires advance payments. As a rule, fees are only incurred when a loan is concluded.