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An installment loan with a fixed rate is precisely calculable

Summary

There are no hidden costs with an installment loan with a fixed rate. The interest rate is already transparent when applying for the loan. Here you can find out everything about this type of loan. Are the costs of an […]

There are no hidden costs with an installment loan with a fixed rate. The interest rate is already transparent when applying for the loan. Here you can find out everything about this type of loan.

Are the costs of an installment loan with a fixed rate transparent?

In general, when comparing loans, the scores for installment loans with a fixed rate are lower. As a result, they are often only chosen by experienced borrowers. This type of loan is often cheaper. Since the creditworthiness of the borrower is not used for the annual interest rate, it does not matter what profession he pursues. In the case of an installment loan with a fixed rate, the amount and the term of the loan are usually decisive. This is a clear advantage as the risk is not placed on a borrower and fixed interest rates result that are transparent and clear. This primarily benefits people who take out an average loan. The installment loan with a fixed rate is often found in car loans.

The image of the installment loan with a fixed rate

Following the introduction of the new consumer credit directive, there has been a significant decline in the advertising of loans, the interest rates of which are linked to the borrower’s creditworthiness. This means that banks are forbidden from applying for loans whose interest rates can never be real and which are therefore not granted. You now need to give examples where the cost of interest is as high as two-thirds of the borrower’s pay. As a result, lending has become much more transparent from the start. Nevertheless, the loan with a fixed rate is easier to see through, as the costs are immediately visible. (Installment Loan – How To Spot Traps When Borrowing Money)