The market for loans with fast availability and low interest rates has grown steadily in recent years. At the beginning of the turn of the millennium, the numerous online banks revolutionized the credit market in terms of applications and conditions. By dispensing with a branch network, low personnel costs and low administrative expenditure, online banks on the Internet can offer loans at more favorable terms. Borrowers who choose a loan offer from an online bank can benefit from a low interest rate thanks to the high offer in the market segment. The high variety of offers has also created an enormous disadvantage, which can be seen in the comparison of several offers. It is no longer possible to compare several loan offers without the Internet. Numerous financial portals now help borrowers compare loans and offer anonymous, free and objective comparison of several loan offers.
Compare instant loans online
Although the interest rate level in the area of instant loans is low, the borrower should not forego the interest rate comparison. In general, borrowers should always differentiate between target and effective interest rates. The borrowing rate is the adjusted interest rate, which does not take into account fees or individual criteria that affect the borrower. In addition to the fees, the effective interest rate also takes into account variable factors such as the borrower’s creditworthiness, duration and loan amount and much more. The borrower can lower the effective interest rate and thus the total loan costs at a crucial point, above all by means of creditworthiness. Today’s creditworthiness is measured primarily by the borrower’s income, but the borrower’s Credit Bureau information also plays a decisive role in the creditworthiness.
The importance of term and loan amount
Borrowers whose decision is made for a short term have to expect a high repayment. The high installments ensure a quick reduction of the remaining debt with a short term. The borrower can therefore benefit from low overall loan costs, especially with short terms. However, a short term results in a high liquidity burden. Borrowers who have only a low income are exposed to the risk of default. The opposite is the case with long terms, here the borrower can benefit from a lower credit default risk, which can mainly be attributed to the lower rates.
The possibilities of repayment with an instant loan
Most instant loan products are a modified form of installment loan, which is why repayment is made in installments. Installment repayment has established itself online with all providers of instant loans, since installment repayment creates numerous advantages for both the borrower and the lender. For example, the borrower can benefit from a constant financial burden and plan the repayment well. When the installment is repaid, the entire loan amount is repaid in consistently high installments and at identical time intervals. For the borrower, because the interest costs are determined from the remaining debt, there is the advantage of falling interest costs. The installment can be well planned by the borrower, which is also to the advantage of the bank, as it can benefit from a low risk of default.
The importance of Credit Bureau in instant credit
With the exception of instant credit online without Credit Bureau, Credit Bureau is still very important when it comes to instant credit. The protection association for general loan protection has been storing for years all data about the consumer, which could be important for the borrowing. In Credit Bureau information, for example, rental contracts, contractual commitments or existing credit liabilities are saved. Borrowers with a positive Credit Bureau information can often look forward to low interest rates when lending, whereas borrowers with a negative Credit Bureau often have to reject the loan application. Borrowers with a negative Credit Bureau information must alternatively use a loan without Credit Bureau. An instant loan without Credit Bureau is always subject to a higher effective interest rate due to the greater risk for the bank.
Secure the right loan quickly and easily online
The application for an instant loan proves to be identical for all providers. The borrower must always fill out an application form beforehand, in addition to providing information on the preferred loan and personal and income information. The bank will then carefully review the application form. Based on the income and the Credit Bureau information, the creditworthiness is then classified and a loan refusal or loan approval is given. In the event of a loan approval, the borrower will already be sent the loan contract electronically or by post. The completed and signed credit agreement must subsequently be sent to the bank by the borrower. In practice, the PostIdent procedure has become established. The PostIdent procedure prevents misuse by a third person. During the PostIdent procedure, an employee of Deutsche Post checks the borrower’s identity using an official photo ID. When the bank receives the loan agreement, payment of the entire loan amount is initiated to the borrower’s account.
Calculate instant loans with a loan calculator
Today, loan calculators enable a quick and free comparison of several instant loan offers on the market. The loan comparison with a loan calculator is quick, free of charge and objective, whereby considerable savings can often be achieved through the low comparison effort. In the loan comparison itself, the borrower can often take into account an individual income in addition to any term, loan amount and use. In this way, the borrower can search for the offer with the lowest effective interest rate and reduce the borrowing costs permanently.