Chic car, new furniture, a modern television – everyone has one or the other wish that they absolutely want to fulfill, for which their own savings are not enough. If you don’t feel like it or have the time to laboriously save the required amount of money, you can currently borrow the missing amount very cheaply from a bank. Thanks to the long-lasting low interest rate phase in the euro zone, installment loans for consumers are currently cheaper than ever!
Installment loans are usually granted without earmarking
The best thing: Since installment loans are granted without earmarking, the bank customer can basically do what he wants with the borrowed money. Unlike, for example, car loans or real estate financing, the bank is usually not interested in what the customer will finance with the installment loan.
For example, if a consumer buys a new vehicle through a car loan, he must subsequently prove the agreed use of the borrowed money by submitting the vehicle registration letter or the car purchase contract to the bank. Since the vehicle also serves as credit security for the institute in this case, car financing is usually granted on more favorable terms than installment loans without a purpose.
Rescheduling and overdraft facility with installment loan
For certain projects, however, it is also advisable to notify the bank of the planned use before taking out a loan when taking out an installment loan. If you want to use the currently low loan interest rates, for example, to reschedule an old loan cheaply or to compensate the used overdraft facility, you should urgently state this in the installment loan application.
The existing debt that is to be settled is therefore not taken into account in the budgetary calculation that the bank carries out in the subsequent credit check. This usually significantly improves the applicant’s creditworthiness, i.e. creditworthiness. As a result, it is much more likely that the bank will agree to the financing request and will also grant the installment loan on better terms.