A loan with low interest rates ensures a low interest burden. Nevertheless, the APR alone does not automatically provide for a particularly favorable loan. What to look for in the credit search for the cheap credit yet, describes the contribution.
Credit with little interest – conditions
The loan with little interest is bound to very different conditions. Most of the lenders look for a particularly good credit rating for the individual interest rate offer. Both the purpose, the duration and the provider also play a crucial role. Credit-based loans without fixed interest rates can always be found very far in the credit comparison calculators. Realistic are the interest rates for people who have a particularly good income and a good scoring. The target groups for conspicuous minimum interest rates are mainly civil servants and civil servants.
Civil service loans not only offer the most favorable interest rates, they also allow a particularly long term. Without the civil servant status, many of the low-interest offers can also be used. Unfortunately, the repayment period, which underlies the low interest rates of the pattern calculation, is often very short. Credits often only become really low-interest through earmarking and public funding.
Pay little interest – credit from the federal government
Politics sets the framework conditions for the development of society. Particularly important goals are therefore supported by the government. The need for credit to achieve the set targets is subsidized by the state. A good example is the business start-up loan or the energetic housing renovation.
The political goal of the restructuring loans is the energy saving in the private household. The KfW (Kreditanstalt für Wiederaufbau) is the promotional bank of the state. In most cases, it does not forgive the loan itself, but guarantees credit security. A commercial bank takes over the loan transaction.
Other political objectives, which are to be made possible by the loan with little interest, serve the education. It is the education loan and the master BAföG. The low interest rate on education and training, with government support, is not tied to creditworthiness.
The loan conditions are more important than the annual percentage rate
If you only use the annual percentage rate when searching for a loan, you will not automatically find the cheapest loan. If a “voluntary” residual debt insurance is required to receive the interest, then these costs are not obvious at first glance. The cost of borrowing can increase for voluntary residual debt insurance without taking it into the APR.
It can also be expensive if not all costs are calculated back if the loan is repaid early. For example, the processing fee will not be refunded without a separate agreement. In addition, the special repayment may be subject to prepayment interest.
The car loan without the right to free special repayment is for most a very expensive credit decision. Vehicles are exchanged very often, even before they were finally paid off. Still, a low-interest loan should not seduce you into losing sight of other credit terms.