More and more borrowers are now looking for a quickly available and easy-to-apply loan product. Borrowers who appreciate flexible contract options, low interest rates and simple applications are now increasingly using an instant loan. Immediate loans are the loan offers of direct and online banks, which can be offered directly on the Internet and can be applied for “immediately” online. The variety of offers in the instant credit market segment has seen significant growth in recent years with the increase in online banks. For this reason, borrowers who are looking for a powerful instant loan offer now have the option to choose between many offers. The decisive advantage with the wide range of offers can be seen in the low interest rate level. However, the large selection also has a decisive disadvantage, comparability is hardly possible today. Borrowers who want to win the best individual loan offer for themselves cannot avoid a comparison on the Internet.
The effective interest rate
When comparing instant loans, borrowers should focus primarily on effective interest rates as the most important comparison criterion. The effective interest rate is actually variable for all instant loan offers and can be individually influenced by the borrower. Although the instant loan depends on the borrowing rate and the bank’s fees, the borrower has the option of influencing the effective interest rate over the term and loan amount as well as his own credit rating. A positive credit rating can make a decisive contribution to ensuring that the borrower can secure the best long-term interest rate. Today’s creditworthiness is measured primarily by income and Credit Bureau information. Ideally, the borrower’s earned income should be high and constant. The borrower can also influence the effective interest rate through positive Credit Bureau information, the same applies to the loan amount and term, which should be short or short. Short terms and low loan amounts are issued by the banks at a lower interest rate, since the credit default risk and capital commitment for the lending bank are lower.
The importance of term and loan amount
As such, term and loan amount do not only influence the amount of the effective interest. Borrowers should always select the term and loan amount so that the repayment meets individual requirements and the liquidity burden is not too high. Borrowers with a low income in particular very often run the risk of excessive financial burdens. High rates ensure a quick reduction of the remaining debt and the associated low interest costs, but high rates also quickly increase the credit default risk.
The possibilities of repayment with an instant loan
Most banks today only offer the option of repayment in installments in connection with an instant loan. Installment repayment has become established for numerous loan offers, since in addition to a constant liquidity burden for the borrower, this also offers a low credit default risk for both contracting parties. When the installment is repaid, the entire loan amount is repaid at constant intervals and in constant installments. The installment repayment offers the borrower a quick reduction of the remaining debt, whereby the total loan costs decrease with increasing repayment. On the part of the bank, the low credit default risk should be emphasized. The bank can already record a certain proportion of the repayment after a long time.
In addition to repayment in installments, other forms of repayment are also possible for the repayment of an immediate loan, such as annuity repayment. In the case of annuity repayment, the borrower pays a fixed annuity at constant time intervals. The amount of the annuity consists of a repayment and interest part. While the repayment component increases during the term, the interest component decreases, and the borrower can make the repayment here in exactly the same amounts. The principle of installment repayment is also followed for annuity repayment; constant amounts at fixed intervals ensure that the borrower has a low risk of default.
Possible uses for instant loans
As a rule, the borrower can arrange the use of an instant loan at his own discretion. This enables the borrower to use the instant loan for a wide range of purposes. Among other things, the smava instant loan is suitable for financing a car, as a loan for debt rescheduling, the financing of electronic devices and much more. on.
The advantage of quick and easy application via the Internet
The crucial aspect that should speak for an instant loan is the quick and easy application for the loan via the Internet. Borrowers who opt for an instant loan can make the application quickly and free of charge on the website of the relevant provider. The first step in getting your dream loan is to fill out an application form. In addition to information on the desired loan, the borrower must also provide information on the person and creditworthiness in the application form. Once the information has been provided, the credit check is carried out by the bank. The credit check includes checking the Credit Bureau information. Today, instant loans without Credit Bureau are also offered, here the Credit Bureau information is not checked. If the bank comes to a positive credit decision during the credit check, the borrower can already download, print and sign the loan agreement below. The PostIdent procedure in cooperation with Deutsche Post contributes to secure contract processing. In the PostIdent procedure, the authority of the borrower is checked at a branch of Deutsche Post. The person is compared with an official photo ID (identity card, passport). Once the PostIdent has been concluded and the contract has been received by the bank, the immediate payment of the loan amount is initiated to the applicant’s account.
The position of Credit Bureau in the instant lending
As with all other forms of credit, the Credit Bureau information provided by the borrower is rarely dispensed with for instant loans. In the course of the life of every private individual, the protection association for general credit protection collects all relevant data which could be important for taking out a loan. Here, among other things, existing tenancies, contractual obligations, subscriptions or existing or concluded loan liabilities are listed.
Compare instant loans on the Internet before signing a contract – use the loan calculator and save
Financial portals on the Internet make it possible to quickly and free of charge compare multiple loan offers. The loan comparison is now often offered with a loan calculator, which enables the objective comparison of loans taking into account individual comparison parameters. In the loan calculator comparison, borrowers can often find information on the desired loan amount, term, use, repayment and much more. integrated. By taking personal earnings into account, the search can be tailored to individual requirements and the best loan offers can be filtered out. The loan comparison with a loan calculator can usually help the borrower to secure a lower interest rate in the long term and to lower the borrowing costs permanently.