What do I have to consider with an online loan?

Loans have never been cheaper than they are now. This is exactly why many consumers are now taking the opportunity to finally realize long-planned projects with the help of cheap financing. The low-interest offers from online direct banks in particular catch the eye. If branch banks often charge 7 percent or more interest for a short-term installment loan, some direct banks even advertise interest rates below three percent. Online loans are sporadiceven offered at zero percent interest. But beware! No bank has anything to give away - often the zero percent credit is just a clever marketing campaign. However, according to a study by Stiftung Warentest, many online loans from direct banks are definitely recommended. The interest rate is not the only thing that matters, according to Stiftung Warentest . We will tell you what you should pay attention to when taking out an online loan.

Compare loans online

There are several ways to find the right loan provider. For many consumers, looking at a loan comparison is the first step in the search for the right online loan. Good comparison sites on the Internet provide an overview of current providers and conditions at the push of a button. With the help of a loan calculator, various alternatives with regard to the term and the loan amount can be played through in no time at all. Since 2010, banks have had to state the effective annual interest rate for credit-related loans, which applies to at least two-thirds of all customers. In addition, according to several BGH rulings, banks are no longer allowed to charge loan processing fees for consumer loans. With such regulations, the legislator has made it much easier for the consumer To be able to compare loan offers directly with each other. Anyone who obtains a self-assessment from the Schufa free of charge once a year, keeps an eye on their income and expenses and still has money left over at the end of the month can very likely expect to receive the interest rate specified in the loan comparison. However, anyone who has not had exemplary payment behavior in the past or has other loans with high monthly charges should expect a higher interest rate.

consider alternatives

Regardless of the credit rating, it is always advisable to make several loan inquiries from different providers and obtain specific written offers before concluding a loan agreement. In our experience, not only the online direct banks should be included here. Even if branch banks have the reputation of selling their products on the market more expensively than direct banks for the same service, this does not always have to be the case. In practice, it can be seen that branch banks also have products with attractive conditions in their portfolios, or offer purely online product lines in addition to expensive branch products.

Even those who have already been rejected by the bank should think outside the box and look for alternative financing options. Borrowers with mediocre creditworthiness, employees without a long-term permanent position or the self-employed and freelancers on online credit marketplaces may have significantly better chances of an online loan. There, the loan is not granted by a bank, but by many private investors. Although a credit check is also carried out here, the acceptance criteria often differ greatly from those of the banks. Loan seekers who are admitted to the marketplace after the credit check always have better chances of a loan approval than at the bank. Because on a P2P credit marketplace, each investor decides for himself who he iswant to lend money and who doesn't.

Both banks and online credit marketplaces obtain information from the Schufa to check their customers’ creditworthiness. If you make several loan requests from different providers, you should make sure that the Schufa request does not affect your Schufa score. Accordingly, the Schufa request should always be made as a "conditions request".

However, once you have a negative Schufa entry, the chances of getting a loan from both banks in Germany and online credit marketplaces are almost zero. In such cases, a loan without Credit Bureau can be the solution. The so-called " Swiss loan " does not require a Schufa report and is therefore primarily suitable for private individuals who may have a negative entry in the Schufa but otherwise have a good credit rating. The Swiss loan is tied to precisely defined criteria that the applicant must meet - such as a certain minimum income or a minimum continuous period of employment with the same employer.

Choose the right credit key data

While at the house bank, the bank advisor discusses exactly what the current financial situation looks like and what the maximum rate the borrower can afford per month, this advisory service for online loans, if at all, often only takes place afterwards - i.e. after the loan application . Therefore, the applicant for an online loan is first obliged to find out for himself what loan amount he actually needs and what the maximum monthly rate may be. In order to determine what amount you can afford monthly without any problems, it is advisable to keep a household book over several months, which compares the monthly income with the expenses. The borrower may still have savings that reduce the actual need for credit. There may already be other loan liabilities that can be combined in the course of the new loan, which leads to a significant reduction in the overall loan burden. Residual debt insurance is often offered with the online loan (note: the check mark in the application form is often already set by default!) – but is this really always necessary? The borrower should make all these considerations before applying for the new loan. Anyone who needs support here can also contact reputable credit experts before applying for their online loan. Our creditSUN employees are happy to answer any questions you may have about your online loan. The advisory service is included and the borrower has the certainty

Pay attention to flexible repayment terms

What use is the cheapest online loan if you are tied to fixed monthly payments and a fixed term? Let's say a borrower takes out an online loan with no breaks in installments and no early repayment option. Now in one month he has significantly higher expenses than usual due to an unplanned high bill. Since he cannot pause the loan, he has no choice but to either leave the bill open for the time being or to overdraw his account to pay the bill. Both have negative effects on his creditworthiness. On the other hand, if he has inherited, for example, or has a higher income due to a job change, he could repay larger amounts in some months or even repay the full loan amount early. That way he would be debt-free faster and could save a lot of money. Since 2010, banks have only been able to demand a prepayment penalty of a maximum of 1% of the remaining debt for early repayment if the loan has at least 12 months left to run. However, if the loan agreement does not allow early repayment at all, the interest payments must continue to be made until the end of the term. Hence our tip: Make sure in the loan agreement that you retain a certain amount of flexibility when repaying your loan. the interest payments must continue to be made until the end of the term. Hence our tip: Make sure in the loan agreement that you retain a certain amount of flexibility when repaying your loan. the interest payments must continue to be made until the end of the term. Hence our tip: Make sure in the loan agreement that you retain a certain amount of flexibility when repaying your loan.