Who does not know that: There are always sudden investments that are necessary but expensive. Repairs or similar things can also become an expensive and unexpected matter for consumers who don’t have the money so easily. Get the loan you want quickly with an online loan comparison.
For this reason, the classic installment loan has become one of the most popular forms of credit. This is requested directly from the relevant bank without having to specify a specific purpose. The borrower can therefore freely dispose of his money in the private sphere and thus escape a financial emergency. However, there are a few things to look out for before consumers decide to take out an installment loan. At Kredit-Vergleich.com you can carry out a loan comparison online.
What is an installment loan and how does it work?
Installment loan is the most classic form of loan. After a successful review of the documents, the desired loan amount is paid out by the bank to the applicant, who then repays the loan to the bank in monthly installments. How high these rates are agreed in advance in a written contract.
The following applies: the longer the term, the lower the monthly rate. At the same time, the interest rate usually rises with a longer term, making the loan more expensive overall. It must therefore be carefully considered whether and how this funding can be made possible. Especially for loans with a relatively long term, it is recommended to use a comparison calculator beforehand. These are available free of charge on many websites on the Internet and provide targeted help.
Creditworthiness of the borrowers
For credit institutions, income in this sense is considered to be labor income only. A transfer benefit such as unemployment benefit is an income for the unemployed payee. However, it does not result from work and is therefore not suitable as security for a loan. The income from work must not only be secure, but also correspondingly high. It must be visibly above the garnishment exemption limit, which is just over a thousand euros for one person. If the labor income were lower, the lender would have no way of getting the loan repaid by means of a garnishment.
Residual debt insurance
This must be discussed individually with the bank. The residual debt insurance covers various risks, such as unemployment, death or even the borrower’s occupational disability, and ensures that relatives or the borrower will have no problems with the further payment of the loan, even in financial need. Occasionally, borrowers may incur additional costs at regular interest rates that are added to calculate the rate.
Applying for the installment loan online is particularly easy and quick
The easiest way to submit an application is via the Internet, since the processing is much faster than if the applicant visited a branch. Both the credit check and the examination of the documents usually take only one to three working days – afterwards it is immediately known whether the loan is granted or not. The amount will also be paid out within a few days if the check is successful.