A lot has happened in recent years. Since the Internet was launched, consumers have had the opportunity to find out more and do extensive research before deciding which provider to take out a loan with. All banks advertise that they offer cheap loans, but you shouldn’t blindly trust this advertisement if you really value cheap loans.
Find cheap loans through the loan comparison
If you want to save yourself the trouble of visiting the websites of the various banks, looking at the offers, and then making a decision that you cannot be sure of having taken out a really cheap loan, better use the free loan comparison on the Internet. These comparison portals have listed the best providers with the current conditions, so that a direct comparison is possible. Anyone who thinks that this is so easy will be disappointed, because it is not that easy to find cheap loans. You have to carry out a credit comparison in a qualified manner, because there are a few things to consider when it comes to cheap loans.
Cheap loans with interest rates dependent on creditworthiness
The majority of banks that offer cheap loans work with interest rates that depend on creditworthiness. This has the advantage in advertising that an interest rate can be advertised that is optically very cheap, but is not given to most borrowers. The interest depends on the creditworthiness and the bank determines who has which creditworthiness. A borrower of 1,000 may get the cheap advertised interest, everyone else may also get a cheap loan, but not at the rate that is advertised. If you want to get an idea before making an inquiry, you should take a look at the representative example that banks want to publish in parallel with advertising. This example represents the interest rate granted to two-thirds of all borrowers.
Basically, the credit is always cheaper if the credit rating is better assessed. It comes down to many individual factors that influence personal creditworthiness, but which the borrower himself can only change to a limited extent. In order to have the best possible creditworthiness, as a consumer you can only make sure that you always meet your payment obligations regularly and keep credit score clean.
If cheap loans with interest rates dependent on creditworthiness are to be taken out, one must always have several offers drawn up by the preferred banks and compare them again because of the better comparison options. This takes a little time and is a bit of a hassle, but the effort can pay off in many hundreds of dollars that may not have to be paid because there are cheap loans and less cheap loans.
Cheap loans with fixed interest rates
Fixed-rate offers are an alternative to credit with interest rates dependent on creditworthiness. The proportion of banks that offer loans with fixed interest rates is significantly lower and, for that reason alone, more comparable. Since interest rates only change depending on the amount of the loan and the term, you save the time required to obtain personal offers. Loans with fixed interest rates can be compared directly in the loan comparison and can be applied for immediately with the bank that offers the cheapest loan.
It goes without saying that the effective annual interest rate for these loan offers is somewhat higher from the outset. To make sure that the loans are cheap, you only have to look at the representative examples of the other banks. A quick glance is enough to determine that the fixed-rate offer just doesn’t look that cheap. In fact, they are cheap loans.
Cheap loans and creditworthiness
The banks’ loan offers look as if they are offers aimed at every consumer. This is not the case, the banks only lend to customers who they believe are able to repay the loan as agreed. The creditworthiness of each loan applicant is checked in advance. The credit information is obtained, which says a lot about the payment behavior in the past and the existing obligations, and a budget calculation is carried out. In the context of this budget calculation, the banks determine the extent to which a borrower’s economic performance is ensured.
You only get credit if you are creditworthy. Very cheap loans are reserved for customers who have a 1A credit rating. Those who are not considered creditworthy by the banks can expect the loan application to be rejected.
Don’t make cheap loans unnecessarily expensive
The cheapest loan is expensive if you do not pay attention to the ancillary loan costs when you take out the loan. Many banks like to sell their loans with residual debt insurance. This insurance is intended to give the bank and customers additional security, but it is not for free. The cost of the insurance premium is not included in the effective interest rate, but can make a loan more expensive overall. Credit insurance is usually not necessary for a normal installment loan.