Credit, Financing , Loans – these tools are self-evident these days: Hardly any major purchase works without the assistance of a lender, any convenient installment is in principle a loan. However, over time, different varieties have developed that have revolutionized the business once reserved for traditional branch banks. Here is an overview.
Comparing loans – this is how it works today
Until the triumph of the World Wide Web, loans were the exclusive affair of the branch banks: if you need money, you have arranged an appointment with a consultant of your bank and discussed the matter. He checked the account history, asked a lot of questions and of course requested documents. The loan application has been completed and forwarded to the responsible department. There was checked, possibly again asked and decided. If everything ran smoothly, the bank adviser received the prepared loan agreement and you could sign it again in the branch office. Then the contract went back to the credit department and the money was paid into the account .
It was at this time very expensive to compare the loan interest of the house bank with those of other banks. The processing would also have dragged there even longer, finally, an alternative bank would have to first obtain a bank statement. With the first direct banks and online providers changed the sheet: The Internet now allows a very convenient research of the current conditions, which you can even easier with a sound credit comparison. It fulfills several functions and ultimately serves as a platform that provides direct access to the lenders.
How a credit comparison calculator works
Above all, it is the standardized installment and personal loans that make it easy to research, compare and conclude online. There are only three variable sizes that you can modify as needed in the comparison calculator:
- the loan amount
- the period
- the monthly rate
In order to filter out the right offer, it also asks for the intended use – it can have an effect on the conditions.
To provide a good overview, the credit comparison is fed with the interest rates and contractual conditions that are granted by the affiliated providers. If there are any changes or if the banks and financial service providers grant special conditions for a certain period of time, these data flow directly into the loan calculator . In a word, you save a lot of work, which would even cause research on the Internet. Above all, you will be provided with all relevant information. These are:
- the provider
- the borrowing rate – as a fixed value or from-to-spread
- The annual percentage rate of charge – as a fixed value or from-to-spread
- the resulting most favorable monthly rate
In addition, you will find in the list of results sorted by installment, but other interesting facts that you should necessarily include in the evaluation:
- Example calculation according to price regulation
In order to make the comparability of offers plausible, the providers have to publish a sample invoice. The conditions are used, which receive two-thirds of all customers of the respective bank. The interest rates, the monthly installments and the resulting total financing costs are listed.
- credit details
Under this button, all the important criteria for the respective offer are summarized, such as the general conditions, but also the entry requirements and any special features that set this provider apart from the competition – in the positive as in the negative.
In addition, the loan calculator assumes another important function: Not all banks serve all credit options. If your entries blow up the capabilities of a lender, it will fall out of the results. So you just have to deal with the banks and financial service providers who would really work on your loan request.
Speaking of financial service providers, you will not only find German and European branch and direct banks in the result lists, but also credit card companies and financial service providers who either have themselves acquired a banking license or act as intermediaries. For this purpose, they conclude framework agreements with banks and receive certain quotas. Since the entire processing of a loan request from the financial service provider, usually digitally optimized, takes place, favorable conditions can be granted. But there is also a new and relatively new category of lenders: platforms that raise capital from private investors to loan seekers and handle the processing of loans. The credit landscape has become so diverse, which increases your chances, but also requires a lot of financial knowledge.
Which loans can be compared on the internet?
Of course, there are also special loan calculator for the complex real estate financing, however, can only give clues. The exact vote, such as the valuation of the property and the consequent conditions, takes place in dialogue with the bank. The reason: The numerous variable sizes can indeed be modified in the credit comparison, but these are just examples. The situation with commercial loans is just as difficult, as it is here that the question of collateral must be explicitly examined in order to keep the risks for banks in a moderate relationship.
In order to be able to compare credits effectively, uniform conditions should apply – and this is primarily the case with consumer loans , which are also referred to as personal credit , installment credit , consumer credit or online credit . Here, your credit rating and the regular income play the main role, additional security is not required for the freely usable loans. The loans are designed so that the interest is fixed for the term, so that the rates remain the same. In addition, providers are trying to set themselves apart from the competition with flexible credit conditions – you can effectively benefit from this pressure.
The credit options that you can compare online include:
- Installment credits for free use
- consumer credit
- Loans for debt restructuring
- Car loans in different variants
- Loans for motorcycles, caravans, new and used cars
- Student loans
- Loans from private
- Credit without
- Swiss loans
- small loans
- Mini loans
- instant loans
- Loans for the self-employed
- Fast loans
- lightning loans
So diversity is huge, with lenders specializing in specific market segments and audiences. Overall, the number of private and installment loans granted is rising steadily, as is the number of providers who serve this lucrative business segment. All the more important are the credit comparison calculators that make your search easier.
Fact is :
- A credit comparison online usually refers to standardized loans that are taken for private purposes.
- The credit calculator will give you an overview of the current conditions of the providers.
- The conditions are largely standardized, but in some aspects there are differences that are presented transparently.
Which credit requirements have to be met in general?
In order to receive such a classic installment loan, the banks and financial service providers require certain things – here a credit check:
You have to be at least 18 years old, as you are fully able to work in Germany and thus can conclude effective contracts.
- Bank account and primary residence
If you want to take out a loan in Germany, you must also live here and keep an account with a German commercial bank.
As an employed person, you should have been employed by your current employer for at least half a year. During the probationary period, loans are usually denied because the period of notice is then extremely short and increases the risk for the lender.
Your employment should not be limited in time to be acceptable to the lender as collateral. If there is a time limit, the loan should be repaid during this time.
- Income documents and bank statements
Since consumer credit is primarily geared to regular income, you should have proof of income at your disposal. The income should clearly exceed your expenses in order to confirm the returnability of the lender. That is why banks often demand complete statements of account, which represent the ratio of your money receipts and withdrawals. The type and amount of proof of income to be submitted depend on the industry in which you work: Employees are usually required to pay the last three payslips, and retirees the last of the last pensions.
For self-employed it is much harder to get a loan. The income is not regular and depends on the order situation, so that if necessary it must submit the business evaluations and tax assessments of the last three years.
- On own account
Taking out cheap loans for third parties is generally difficult. In these cases, the lender can not check the creditworthiness, which can lead to credit losses. Therefore, you are expected to confirm that you accept the loan for your own account and at your own expense.
Ultimately, every German bank asks for credit information, usually from SCHUFA or another credit agency. From the information stored there, the credit agency calculates a score value that gives orientation to the creditworthiness. Negative entries, such as defaults or bankruptcy, degrade this value – and thus the chances of a loan.
If you meet these conditions, you may ask yourself: How much credit do I get?
To answer this question, a cash fall is required first: record your regular income, including any ancillary income, investment income, maintenance or pension benefits. However, one-off bonuses are not included. Then you expect the monthly expenses against it. These include, for example:
- the rent and ancillary costs
- contractual obligations such as insurance and other loans
- Costs for telephone, television or other services
- possible maintenance payments
- Car and gasoline costs including repairs and maintenance
- Cost of living
At first, you may be surprised what you spend a lot of money doing at the same time – such a downfall is definitely instructive and a good opportunity to put some positions to the test. The difference between revenue and expenditure is important, as it opens the room for credit rates.
Fact is :
Optimize your expenses by regularly checking supply contracts for electricity , telephone, gas and of course insurance. Of course, this also applies to existing loans, because a rescheduling can properly save money here.
Once you have determined your financial leeway so that it is also reliably available, you start the loan comparison: Varies loan amount and term until you have reached the possible rate in a feasible period.
Plan sufficient security buffers to avoid payment problems at unforeseen costs. If necessary, you can also involve a second borrower. This improves the chances, but the co-applicant is also fully liable if you can no longer service the loan.
Which comes as a best credit in question?
That’s important: Of course, a bank loan comparison is primarily used to identify loans that are cheap for the particular need. After entering the desired loan amount, the term and the intended use, the current offers are listed – including the interest rates and resulting monthly installments. In the evaluation, you should proceed with caution, because the credit-related conditions look favorable only at first glance. In most cases, you score better with credit-independent variants – but an exact decision basis is only after a condition query.
In addition, interest rates are not the only thing that determines whether a loan is cheap: for example, if you have to provide additional collateral or accept inflexible terms for a cheap loan, this can be a disadvantage on the bottom line. High-quality loans, for example, provide for special repayments – up to early repayment. Rate breaks may also be allowed to bridge financial bottlenecks and avoid annoyance. If a lender requires the completion of a residual debt or installment insurance, you should refrain from this: This hedge is usually too expensive and better to manage with private term life and disability insurance.
Not only the interest rates decide whether a loan is cheap. The contractual arrangements should also play a role in the assessment.
Most frequently requested loan sums
Credit, loan, financing – what is behind it?
Did you know that loans have been completed for more than 5,000 years? Below you will find not only interesting facts from the story, but also explanations to the most important terms.
3000 BC Chr .: The principle has been proven for millennia: money or goods are lent, in return, the debtor has to pay interest. Written documents prove that already around 3000 BC. In the extremely fertile area between the Tigris and the Euphrates, crops of corn were given to farmers to recover more after harvest. As lenders in Mesopotamia, priests of God worshiped in each city appeared. As clay tablets prove, interest rates were even calculated daily.
2000 BC Chr .: Around 2000 BC Loans were even traded securities: merchants in today’s Cappadocia funded namely against promissory notes whole caravans, which transported especially metals such as gold, silver and copper in the Assyrian Empire – that are about 1,000 kilometers. For the return journey, the caravan then loaded tin or textiles. These promissory notes were traded when, for example, one of the investors wanted to have his money back early. He then sold his promissory note – of course for a decent discount.
1000 BC Chr. This pre-financing won the day, trading voyages in ancient Greece was organized by ship-owners. Around 700 BC Chr. Flourished the loan market in Piraeus, here namely the sea credits were agreed. The default rate was naturally very high, numerous shipwrecks or robbery robberies drove the conditions up: Up to 33 percent had to be used up. At the same time, coinage prevailed, which dates back to the Asia Minor Greeks. Already around 450 BC The Greek tetradrachm was a recognized currency throughout the Mediterranean.
Millennium : In the Roman Empire, pawnbrokers and bankers of course belonged to the cityscape, they had their fixed stalls in the Roman Forum. Not only the business world took advantage of this opportunity to provide itself with liquid funds, but above all the nobility of Rome, endowed with sufficient funds in lucrative offices. Documents prove that around 50 BC. Even an interest ceiling was introduced in order to prevent usury transactions. However, the 12 percent were rarely respected. For example, if reconstruction loans were granted after a major earthquake, borrowers had to pay up to 40 percent.
Middle Ages : Over the centuries, the credit system developed permanently, a real flowering experienced the northern Italian cities in the 13th century: They had risen to trading powers and founded banks to organize the goods and payments also nationwide. The Medici, Peruzzi and Bardi are among the most important families with their own bank branches. Double-entry bookkeeping and paper money orders were invented during this period to reduce the risks of cash shipments. Of course, raids were financed with loans, which were paid off war spoils and tributes. As collateral, the bankers reserved the access to certain stately monopolies, such as the monopoly or monopoly or mining rights.
Renaissance : In the Renaissance, the borrowed from the Italian model borrowing in Germany – not without having an influence on politics. For example, in 1530 Jakob Fugger granted the Habsburg Duke Ferdinand a huge loan of 275,333 guilders – that is more than 12 million euros today. The Augsburg banker thus financed the election to the German king. The procedures were successively refined and secured: in order to carry no cash, Hanse merchants from Cologne, for example, in London paid the desired materials with promissory notes. These were redeemed after the resale of the materials and charged between the banks responsible for the merchant guilds – of course, taking into account discount rates.
Industrialization : From the 16th century, the churches relaxed their interest prohibition – especially private loans were able to prevail. As security, the property was used often enough. This debt and ownership was recorded from the 18th century throughout Germany, which significantly simplified the granting of mortgage loans. The industrialization brought another strong push: The capital requirements rose and produced from 1850 the first modern commercial banks. At the same time, cooperative banks were established, which turned to artisans and farmers with cheap loans. From 1900, the Civil Code provided a uniform credit law for all of Germany – the SCHUFA was created in 1927 in order to be able to better assess the creditworthiness of companies and private individuals.
Modernity : The modern economy is no more functional without credit than the states: The absorption of additional liquidity secures investments in every area of daily life. The banks therefore offer a whole range of credit options, which are tailored to the different needs. However, the banking landscape is rapidly changing: In addition to the traditional branch banks, the direct banks are gradually conquering larger market shares. They handle all transactions – including, of course, loans – exclusively online or by phone. In addition, more and more providers are active in the lending business, such as insurers, building societies, financial service providers or specialized bankers. Above all, however, the loan offerings became comparable – digitization makes this division significantly more transparent.
The credit today – diversity that is unsettling
It has never been so easy to borrow and finance larger projects – as long as the credit rating is right. The internet offers the possibility to compare credit, so you can directly see which bank or financial service provider is best for your loan. In order for you to maneuver safely through the variety of credit offers, here is an overview of the main distinguishing features. Here are the key points on which you can sort the modern loans:
Redemption and repayment
- Redemption Loan: The rate will become smaller over time as interest and redemption portions decrease.
- Annuity Loan: The rate remains the same, even if the interest and redemption portion are successively shifted.
- Fixed loan: Since only interest is paid during the term, the repayment takes place at the same time.
- Short-term loans: The term is limited to one year.
- Medium-term loans: The term varies between one and five years.
- Long-term loans: These contracts are agreed for more than five years.
- Fixed Interest Loans: Interest rates remain the same throughout the term of the loan.
- Variable interest rates: The interest rate has to be redefined regularly depending on the market trend.
A common consumer loan, as you can find it in the credit comparison, is therefore a short to medium-term annuity loan with fixed interest rates for the entire term.
The repayment loan
In the repayment loan certain repayment amounts are fixed, which reduce the loan debt step by step. Accordingly, the interest payable on it will decrease, although the repayment installments remain the same. This loan option is relatively rarely used, the preferred area is commercial housing. The advantage: In the commercial sector, the constant repayment installments can be adjusted to depreciation.
How it works :
If you pay the agreed repayment amount, the debt is reduced. Since this is the basis for calculating the interest, the interest costs are reduced with each repayment. The repayment loan is usually designed to be long-term, with interest being committed only for a certain period of time.
The annuity loan
In contrast, the rates for an annuity loan remain the same. An annuity is the regular payment that contains interest and repayment. Again, the debt is reduced with each repayment, so that the interest burden also decreases. In order to keep the rates constant, the amortization portion becomes larger and larger, while the interest portion of the monthly rate decreases. The annuity loan is preferably used in the long-term variants in private housing. The installment loans are also in this category, but special rules apply here.
How it works :
So, if you agree to a monthly quarterly installment, this will include varying interest and principal. The interest rate is fixed on the annuity loan for a certain period of time. This fixed rate may be 5, 10, 15 or more years. At the end of this period, a renegotiation with the bank takes place, taking into account the then current market situation. The repayment is set at the conclusion of the contract and must usually amount to at least 1% of the total. However, the proportion increases as the interest burden decreases. In addition, special repayments can be agreed, but this option is usually limited or paid for during the fixed interest period.
The festival loan
This variant is also referred to as a term loan, because during the term is not a repayment – only the interest paid. The repayment is then due in an amount, for example from the expiration benefits of life insurance policies, home savings contracts or financial investments.
How it works :
You only pay interest on these medium to long-term loans, which is especially recommended for leased real estate. These costs can be claimed. However, the interest rates are only fixed for a certain period of time or generally agreed variable, which increases the risks in a renegotiation. It does not make sense to take out an insurance or investment in order to repay it. The financing is too expensive according to experience.
In addition, other types of loans are offered, such as a forward loan, EURIBOR or foreign currency loans or home savings loans. A separate area is re commercial loans, companies to financeof their project. However, these variants do not play a role in the online credit comparison since they must always be negotiated with a bank or special providers.
The credit – an indispensable element of the present day
If the financial need exceeds your own resources, a loan can help – this principle has been in place for millennia. In our modern age, not only is there a variety of credit options available to specifically meet the respective needs, the former domain of the banks is increasingly being broken up by financial service providers and special portals. This is how a competition was created that you can exploit: First of all, orient yourself which loan option is best for you. If it is not a special form, you can use a corresponding credit comparison to compare the conditions in detail. Ultimately, you can apply for the required credit online as soon as you meet all the requirements. It has never worked that easy.