The advantage of a loan calculator is obvious: You will get a better loan than if you just go to a bank and apply for one.
Unfortunately, this comparison tool is only available in German language. For our English-speaking readers, we have translated the application process on this page > the best way to get a loan in Germany.
What you should know before applying for the loan …
This loan calculator works with the current conditions from the banks that we “monitor”. These are checked daily. A program has been developed just for this purpose.
The stated banks’ interest rates are just advertised rates. The actual rate may be higher. This is due to two reasons:
Assessment of your creditworthiness by the bank
Some banks work with credit-rating interest. This means that customers with excellent credit ratings pay lower interest rates. A person who does not have a very good credit-rating has to pay higher interest rates for the loan.
The better the creditworthiness of the borrower, the lower the risk to the bank that there will be problems with the credit. So a good credit rating is rewarded with low interest rates.
On the other hand, there are banks that have a standard interest rate for all customers, so their interest rate is independent from a customer’s creditworthiness. With which model a bank operates, can be determined by what is offered. Either a fixed interest rate (e.g. 3.9%) is offered or it is a “from-to” option (e.g. from 2.9 to 5.9%).
Insurance policy for a loan
Banks tend to offer a payment protection insurance, called “Restschuldversicherung” in German. Since payment protection insurances are hardly ever recommended by consumer magazines – they additionally increase the cost of the loan, as banks already bear the risk of loan default with the interest rate – the term “Restschuldversicherung” is seen as negative. Because of that banks came up with new names like “Ratenversicherung” (rates insurance) or “Darlehensschutz” (loan protection) for this additional insurance.
Insurance can be arranged for risks such as death, disability or unemployment. Since this type of insurance is expensive, the interest rate increases.
Questions about loan application?
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