Loans with fixed interest rates are characterized primarily by the fact that the debit interest or the annual interest rate remain unchanged over the entire term and do not depend on the customer’s creditworthiness. For this reason, fixed-rate loans are also called credit-independent loans.
Credit-independent and credit-dependent loans
If you carry out a credit comparison on the Internet, you will very quickly find that the banks offer not only credit-independent but also credit-dependent loans. Before taking out a loan, each customer should decide which variant is more favorable for them.
Loans with fixed interest rates are not only suitable for people who attach great importance to great planning security over several years, but are also recommended for all borrowers who would have to pay very high interest rates for a credit-related loan due to their income ratios. This primarily affects the lower and middle income groups.
Credit-dependent loans can be recognized by the fact that the effective annual interest rate has the addition “from …”. Here, all borrowers can assume that the low interest rates only apply to civil servants, long-term employees in the public service or other people who are characterized by a very high and secure income and an impeccable credit rating. Using a credit comparison on the Internet, every potential borrower could quickly determine whether a credit-related loan is lucrative for him or whether he should prefer fixed-rate loans.
Application, approval and payment
Almost all loans with fixed interest rates can be applied for online. If you do not want this, you can also contact a bank or savings bank branch and apply there. Regardless of which route is ultimately preferred, the bank must obtain Credit Bureau information from the customer. This can be done within a few seconds. Only if the result is positive does the customer have any chance of getting the loan approved.
In addition, the income would have to be secure and so high that it would not only leave enough scope for paying the loan installments and making a living, but also for unforeseen expenses. If all requirements are met, the credit can be transferred to the customer’s account within a few days. A cash payment is only very rarely practiced and is often associated with considerable additional work for the banks.
There are clear rules for the repayment of the loan. This affects both the amount of the monthly loan installments and the length of the term. In certain circumstances, it is also possible to make major special repayments or to redeem the loan early. However, it would be important to anchor a corresponding clause in the loan agreement.