Despite low interest rates: consumers pay over 2 billion euros too much for loans every year

Last year, consumers in Germany concluded new installment loans with a volume of 102.2 billion euros. Those who completed their loan on the Internet paid an average of 1.67 percentage points less interest than the national average- Find the Best Payday Loans in 2018. If all borrowers had completed their loan on the internet, they would have saved a total of 2.2 billion euros. This is shown by data from the Bundesbank, Schufa and the credit portal Smava.

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“Not all borrowers are aware that there are large price differences in loans even in the current low-interest-rate phase. That’s why we create transparency and want to encourage consumers to compare their credit prices. For anyone who has to borrow money should not have to pay too much for interest, “says Alexander Artopé, Managing Director of Smava.


706 Euro instead of 997 Euro – online credit saving saves 29 percent

Despite low-interest rates, 2017 saw large interest rate differentials. According to the Bundesbank, consumers paid an annual interest rate of 5.75 percent, according to the Bundesbank. Who completed his loan on the Internet, paid on the information of the online loan portal Smava on average 1.67 percentage points less (4.08%). These interest rate differences caused price differences. The example of the average installment loan shows how strong they turned out. According to Schufa, the average installment loan amounts to 8,854.60 euros and a term of 45.6 months. In the federal average, thee cost 996.91 euros in interest. The average installment loan on the internet cost an average of 705.81 euros in interest. That’s a price difference of 291,10 Euro (29%) per loan. If you add up the price difference per loan to all 7.37 million new installment loans per year according to Schufa, then it becomes clear: If all borrowers had completed their loans online, they would have saved a total of 2.2 billion euros.


Hardly any awareness of price differences

According to Schufa, an average of 1.46 loan offers are compared in Germany before a loan is concluded. In comparison to the total loan offer, that is very little. “This is also because the comparison of branch credit offers is complex, unpleasant and hopeless. I have to go from branch to branch. Always reveal me to a stranger. And in the end, no matter how many stores I visit, I never have a comprehensive overview, “says Artopé. Without knowing it, many consumers pay too much for their credit.


Trend goes to an online credit

According to a GfK market study on consumer and motor vehicle financing on behalf of the Banking Association, the share of credit on the Internet has increased since 2015 from 21 to 27 percent in 2017. “More and more consumers realize: On the Internet, I get the same or even better performance on more favorable terms. So I benefit from the credit on the Internet, “says Artopé.


Going online is not enough – you can only save money with cross-bank credit comparison

“If you only go to a bank, you usually pay too much money,” says Artopé. Banks are focused on selling their own credit products. “Comparing multiple banks is therefore very rewarding.” Those who are not interested in going from store to store and reveal themselves to strangers each time can use credit portals like smava & Co. With them, several loans from different banks can be compared at once. According to the portal, in the case of smava, there are currently 70 loans from 25 banks.