Loans can be obtained from direct banks at much more favorable terms than from house banks. Conventional financial institutions are generally unable to offer conditions as favorable as direct banks. This is because conventional banks maintain branch networks that cause high costs. They pass this on to the end customer in the form of higher interest or credit costs to the end consumer.
Advantages and disadvantages of online banks
These costs no longer apply to online banks , since they do not have a branch network and thus save personnel and space costs. Banking orders are only carried out online, by phone or fax. In addition, these institutes are not tied to opening times. The loan amount is also paid out very quickly after checking the documents. The disadvantage of direct banks is, of course, that there is no personal contact with an advisor. This disadvantage is more than made up for by the lower interest rates and lower loan costs.
Credit comparison with direct banks
However, consumers should also make a loan comparison with direct banks, e.g. B. on online bank before deciding on one of the many providers. A loan comparison on a comparison calculator on the Internet is quite simple. The customer selects the loan amount and the term, and the calculator shows the cheapest providers in a matter of seconds. Many computers also offer the option of entering the intended use for the loan. This also ensures a better selection in the search results.
Credit decision criteria
Those interested in credit should pay particular attention to the effective annual interest rate and the possibility of early repayment of the loan. The APR is the only amount that credit can really be compared to. The annual percentage rate includes the borrowing rate and the processing fee. It is expressed in percent.
The possibility of early redemption without prepayment fees is also an important decision factor. If you want to redeem a loan with a term of 10 years, perhaps after 5 years without a prepayment fee, this option must be agreed in the loan agreement.
Another point to consider for the borrower is the credit dependency of the effective interest rate. The cheapest interest rates are only available with a good credit rating. Therefore, the customer can also search specifically for credit-independent credit offers with fixed interest rates.