Banks and savings banks have been marketing installment loans on a large scale for several years. The installment loan has been a popular means of financing any investment for several decades. In recent years, however, borrowers have also seen a significant change in the area of installment loans in terms of interest rates, flexibility and application.
Significant growth in supply
Installment loans are no longer only offered exclusively by the large commercial banks with a fixed branch system, but also by an increasing number of online and direct banks that only provide credit offers via the Internet. The significant growth in supply in the online sector has contributed to the fact that numerous banks have improved their interest rates and adjusted the access requirements for borrowing.
Today, borrowers can not only benefit from a low interest rate, but also individually determine and plan the contract term, loan amount, use, etc. Borrowers who want to secure the cheapest installment loan on a permanent basis are faced with a difficult task today, and the significant increase in supply in recent years has made the comparison considerably more difficult. A cheap installment loan can now be carried out free of charge via a comparison on the Internet.
This must be taken into account when comparing several offers
When comparing several installment loans on the Internet, borrowers should focus primarily on the effective interest rate. In particular, the distinction between debit and effective interest rates is particularly important, since the debit interest rate is only of limited significance. The borrowing rate represents the adjusted interest rate and does not take into account fees or the individual credit factors. In contrast, the effective interest rate includes not only the borrowing rate, but also other factors such as fees, risks and the creditworthiness of the borrower.
A cheap installment loan is offered especially for borrowers who have a regular high income and positive Credit bureau information. Last but not least, individual factors are taken into account when measuring the effective interest rate, such as the duration and loan amount. Term and loan amount pose a risk for the lending bank, especially long terms and high loan amounts often have a statistically higher credit default risk.For this reason, borrowers should choose a short term and a low loan amount if possible.
One advantage that unites all installment loan offers is the installment repayment. Installment repayment is now considered the cheapest form of repayment because the remaining debt can be quickly reduced in consistently high installments.
Due to the rapid reduction of the remaining debt, the loan costs also decrease with increasing term.
Comparison with a loan calculator helps to get the best deal permanently
A cheap installment loan can best be found today by comparing an installment loan over the Internet. When comparing loans with a loan calculator, various credit characteristics can be taken into account, which means that the borrower can find the loan with the lowest interest rate and the best overall package on a permanent basis.