Different loans, different interest rates. Financing through a bank does not always have to offer the best conditions. Many finances and purchases that are incurred and which can often not be dispensed with can no longer be financed out of one’s own pocket by private households. Waiting and saving until you have the necessary money can not always be enforced, because for certain things the money must be available in close proximity. So the alternative to this dilemma is often a loan from a bank. If you decide to take this route, the next big step is already imminent: comparing the conditions of the various credit institutions. After all, you don’t want to get into a financial emergency with your loan, which can quickly become confusing with the incidental costs of a loan.
Fees for a loan
A bank loan involves a number of different fees. The best known are the interest that has to be paid in addition. The nominal interest is the cost that is actually incurred only for the interest. In addition to these, there is also the effective interest rate, which also includes other costs of the loan. In addition to the interest, there are also fees such as closing fees, various commissions and of course the processing fee. With the effective interest, these fees are already factored in and show you how much you have to pay for the loan for additional costs.
Zero percent financing: the alternative through the dealer
Now, of course, different banks are also demanding different terms from borrowers. In particular, they differ enormously in height, which is why a comparison is definitely worthwhile. Without comparison, you take a risk these days because you would pay too much without a loan comparison. The interest that a bank spends on a loan depends on several factors. It is also worth comparing whether you should finance through your bank at all. Because, as many also know, there is so-called 0% financing, which is issued directly through the dealer from whom you want to buy. For example, car dealers or various electronics stores offer this option. This 0% financing means that you will not incur any costs other than the loan itself that you will have to repay.
Interest rates on car and home finance
The interest rate for car financing is around four to six percent. New cars often have the option of 0% financing, but also with the restriction that this financing is only offered for certain models.
If you decide to build a house or buy a house, you also have to differentiate here. The home loan is often cheaper than a bank loan. Building finance has another difference to bank loans: the longer you set the fixed interest period, the higher the interest rate will be. This also applies to a very large sum that you would like to take out as a loan. Low-interest loans can also be obtained from the state. If you want to buy a house or want to renovate or renovate an existing house, there are certain grants from the state that offer favorable conditions.