Anyone who borrows money from a bank has to pay interest and fees. Understandably, there is a desire to receive low-interest loans in order to keep the costs as low as possible. Depending on the purpose for which the loan is needed, low-interest loans can be applied either from a bank or other public bodies.
Requirements for low-interest loans
Regardless of the type of low-interest loan, it is usually subject to certain conditions. For example, the state-owned KfW bank grants loans at particularly favorable terms for certain uses, such as energy-saving construction or renovation. Environmental protection is particularly important in funding.
Private banks, on the other hand, attach low-interest loans to completely different conditions. The most important criterion is very good creditworthiness with a sufficiently high income and a flawless private lender. The better the creditworthiness of a borrower, the more attractive the conditions offered. On the other hand, if a customer has a higher risk of default, the banks hedge it with a higher interest rate. Banks sometimes try to attract new customers with low-interest loans.
By loan comparison to the low-interest loan
Anyone looking for a low-interest loan should first compare the existing offers. There are basically three options. The classic variant is self-research. However, this is very time consuming and due to a large number of banks, it is hardly possible to compare all loan offers. So the chances of finding the really cheapest loan are slim. A second option is to consult a credit broker. These usually offer a wide range of different loans. However, the danger is that the intermediary offers the loans that bring him the highest commission.
Whether these are the cheapest for the customer is another matter. However, credit intermediaries are a good option if the conditions for a loan target are not optimal. Many intermediaries have specialized in granting loans in difficult situations.
For example, consumers with negative private lender information about credit intermediaries can get a loan without a private lender from a private bank. The easiest way to compare loans is with a loan calculator on the Internet. The databases contain a large number of loans from both direct banks and traditional branch banks. The latter often offer their loans over the Internet at more favorable terms than in the branch. Another advantage of online comparisons is that they are carried out independently. In this way, interested parties can quickly get an overview of the currently lowest-interest loans.
Low-interest loans for civil servants
Civil servants and employees as permanent employees in the public service are considered to be particularly creditworthy due to their secure job and good income. For this reason, they can benefit from particularly cheap civil servant loans at some banks and insurance companies. In addition to a low-interest rate, the long terms of 12 to 20 years are among the great advantages of official loans. As a result, the monthly installment is limited even with higher loan amounts. The possible loan amounts are between 10,000 and 120,000 USD depending on income.
The civil servant loan is a combination of credit and life insurance. Only the interest on the loan is paid to the lender over the term. The repayment is made through the contributions to a life insurance policy. At the end of the term, the loan is paid off in full with the payment from life insurance. Any surpluses are paid directly to the borrower. Since the payments into the life insurance accrue accordingly, there is a relatively low total burden for the borrower with the civil servant loan.
Low-interest loans even without private lender information
The private lender collects data on the payment behavior of German consumers. Anyone who does not pay bills or does not service loans on time will receive a negative entry after a period of time. Since the banks in Germany obtain Schufa information before each loan, it is difficult to obtain a loan in this country. Those who urgently need money then only have the option of contacting a credit broker for a loan without a private lender. Such loans are mostly realized through banks based in Switzerland, which do not ask the German private lender. No data on the loan granted is reported to the private lenders.
Such loans are usually granted for smaller amounts of up to 5,000 USD. However, the prerequisite is that the borrower has a regular income. In addition, he must have been employed by the current employer for at least 12 months continuously. Since income is the only security for the bank, it must be above the garnishment exemption limit. Due to the higher default risk, the interest in private lender-free loans is usually somewhat higher.
There are also clear differences here, so the conditions of the different providers should be compared exactly. Once you have decided on an intermediary’s offer, the loan documents are sent by post or email. These then have to be signed and sent to the bank with the necessary documents such as proof of wages and bank statements. If all requirements are met, the loan amount is transferred to the borrower’s checking account. Most banks also offer postable payments.