When a loan is needed, banks are still among the first port of call. Although the market now offers a whole range of alternatives, its own house bank generally enjoys the greatest confidence among customers. If a favorable loan is promised by the bank, the customer often no longer makes any further comparisons. But at least the bids of other stores or branch banks should be sought to find out whether a cheap loan from the bank really does what it promises.
Conditions for a cheap loan
If a loan is to cause as little cost as possible, this is a question of both the conditions and the collateral, which you can bring your own. Especially in branches of large commercial banks, however, there is often little room for maneuver here, as bank employees are also bound by instructions and can not readily award more favorable terms. It is therefore first a few basic rules hold, with which a favorable loan should be realized by the bank.
In general, the lower the loan amount, the lower the interest rates. Banks often provide examples of a representative nature, but they are tied to ideal conditions and, accordingly, are linked only to relatively small amounts. If you want to save money as an applicant in this way, it is advisable to finance your own project as much as possible with equity and to borrow only for the necessary rest of the financing.
Also, the term plays a crucial role in whether a cheap loan from the bank ultimately also low. The longer the term, the more interest must be paid. It is also a question of your own calculation and budgeting, whether a loan is expensive or cheap. If you can repay the installments in a relatively short time, you will only have to spend a lot of interest on the loan.
Which loan is the cheapest in which situation?
Again, some things need to be clarified in advance: What is the loan required for and how much? A very cheap loan from the bank, for example, a car loan, if you want to finance the purchase of a new car. The advantages of the conditions arise primarily from the type of collateral: The registration certificate Part II (motor vehicle letter) is retained by the financing company until the car is completely paid off.
A favorable loan from the bank is also available to students who wish to finance their studies partly or completely through outside capital. The interest rates are here, if you compare them with installment loans of similar amount, very low. In addition, this species is very long-term and equipped with a repayment-free period, so that there is enough time for a repayment.
Smaller amounts can be most conveniently acquired with a credit line. However, this can only be designated as a favorable credit by the bank if the account management in the target is short-lived and does not exceed the specified credit line. If this is the case, the credit line quickly becomes a very expensive loan, which should not be allowed too much time to pay off. Larger amounts should therefore be better financed through a installment loan.
A cheap loan from the bank should always be compared to similar offers. Features such as the effective interest rate, minimum and maximum amounts and required collateral provide information on when a truly acceptable loan is available and when it is not.