The low interest loan is a dream of anyone who wants to take out a loan. It is also clear why you should pay more money in the end, as you have taken. Nowadays, the big banks have to adapt too, because there are many ways to get interest free loans. Twenty to thirty years ago, interest-free credit was almost nowhere to be found – today it’s commonplace. Of course, there are still often loans with interest, but there are far fewer than before. Today, banks are promoting attractive interest-free loans to attract new customers.
Why do banks grant loans with low interest rates?
Certainly some people are considering asking this question. The problem these days, which the big banks have, is that there are more and more different ways for people to access the money legally without any interest or only very small ones (compared to big banks). You can get money from private investors nowadays. There are special platforms that lend people money from other people. These platforms are useful in connecting private investors with private borrowers.
The interest rate that arises there depends entirely on how the private investor sets it. Of course, it makes no sense here that the private investors give their money free of charge to the borrowers.
Therefore, there are usually some interest rates, but still relatively limited in comparison to large banks, hold. For this reason, many borrowers are considering whether they would prefer to take a loan from private investors. This is a big problem for the big banks, because they lose many customers.
For this reason, many large banks today provide credit at a 0 percent interest rate. Mostly these are rather small loans up to 10,000 euros, which are covered by a 0 percent interest rate. In addition, mostly 0 percent interest rate loans are only offers that are not permanently available.
The banks are trying to attract customers. Borrowers also have the option these days, for example, if they want to buy a washing machine in an electronics store, to be financed there by their own banks. Many electronics stores offer their customers advantageous financing with a 0 percent condition.
For these reasons, some potential borrowers turn away from the big banks and go directly to the sellers (electronics, car dealers and co) or go to various online platforms and get loans at advantageous low interest rates.
Does it make sense not to get the loan from the bank?
It can be an option not to borrow money from a large bank, but to take other opportunities. But one must weigh the situations, because not always are private investors or in-house banks of the traders the perfect way out. One has to deal exactly with the conditions to which the credits are granted and on this basis achieve a result.
Sometimes, a low interest rate loan can make more sense than a loan from a private investor. The private investor usually lends relatively little money to a bank. If you want to buy a house or an expensive car, then it is certainly advantageous to go to a large bank and get advice on their contract terms.
With a large bank, you also have the option of early loan release. That is, if you have already saved the money and you do not want to repay the bank’s monthly money, so you can pay back this Aufschlag. It should be noted, however, that if you take advantage of this opportunity, most banks require high interest rates, as the banks lose them as a monthly source of income.
5 tips on low interest rates
1. Find a loan with a low interest rate
The interested party should first look around the Internet on various comparison portals. There are often offers that offer a very favorable interest rate. Particularly noteworthy are those offers that promise zero interest rates for a certain term. Even with your own house bank, the conditions for a low-interest loan can be discussed.
Ultimately, every borrower is free to hire a credit intermediary, who determines the best offer for him. Here, however, the costs of the mediation may also have to be included in the total amount.
2. Lower the interest rate
There are also various ways to get a loan, which actually requires higher interest rates, on more favorable terms. First, it depends on your own credit rating, because the better this turns out, the sooner banks forgive a loan on good terms. On the other hand, the interest rate can be influenced by yourself. Anyone who is able to prove that they have sufficient collateral in addition to a clean credit bureau and good earnings can certainly enter into negotiations with his bank or the provider from the net and talk about lowering the interest rate.
Also over the term much of the interest rate can be changed again. If, for example, higher installments can be paid, the interest charge can be significantly reduced. In particular, the customer should be informed about the possibility of early repayment, because even over this many expenses can be saved.
3. Push up the credit bureau score
A very good way to ensure better interest rates is to score significantly higher at the credit bureau. This is easier than expected, because many factors in the score determination can be quite influence. So first no longer needed current accounts, credit cards and depots should be terminated. If this has happened, the highest possible credit line should be granted within the framework of one’s own credit rating. If there are still open credit card bills in the room, then it is recommended to have them fully debited monthly.
In no case is the installment function to be used, because this raises doubts about the payment power. Also, the Dispo should never be taken, because it can be proven that a loan is actually not necessary. As the score increases, so too does the interest on the loans offered.
4. Pay attention to variable interest rates
The financial market is not static, but changes over time. For example, developments on the stock market, the collapse of companies or the IPO of new companies can quickly lead to ups and downs. Interest rates are also geared to these fluctuations, although of course this does not happen on a daily basis and interest rate adjustments take place at greater intervals.
A rogue who thinks evil is that banks so much forgive loans with a fixed rate over the entire term. Therefore, the client should look for variable offers that dynamically adjust to market interest rates. However, a bit of self-employment is also necessary, as the banks like to correct an interest rate quickly, but usually wait a month or two before reducing it.
Anyone who keeps a close eye on the market and immediately contacts their bank when interest rates drop can also save a lot of money in the long run.
5. Observe the cancellation policy
Anyone who has already concluded a loan agreement, but can also be corrected in another way, the interest rate significantly down. It is important to read the cancellation policy carefully and to get legal advice. If this is not correct and does not know all the points and possibilities exactly, the loan agreement can be revoked even after years.
This will allow you to enjoy a much cheaper follow-up financing. This “detour” is not illegal, but a legally enforced law, in addition, the corresponding legally binding judgments were made.