Thousands of low-interest installment loans are issued by private banks every year. The reasons are almost always the same: vacation, new car or just a few cash reserves in stock. An installment loan provides the customer with new funds in the medium to long term.
As a rule, the installment loan is repaid in equal installments. Only if another arrangement has been made with the bank, one can pay off the loan also extraordinarily without additional fees. In general, however, an installment loan includes a fixed repayment plan to keep the loan so clear to the consumer and keep the bank’s cost structure low.
The installment loan is advertised by banks under various names. Personal loan, personal loan, purchase loan or other marketing terms. But actually the banks always mean the installment loan.
Incidentally, installment credit is more suitable for bridging financial bottlenecks than a credit line (also called dispo), as interest rates are significantly cheaper. On the other hand, the Dispo is preferable, if you know that you need the loan only for a few days. Incidentally, to finance cars and real estate, better earmarked loans are used, as they are also cheaper in terms of financing. If, on the other hand, you want to fulfill some luxury, such as a trip, then the installment loan is just right. If you want to take a installment loan, you should inform yourself at various banks. Although all carry out a credit check, but the fees are sometimes significantly different. Incidentally, before you finally sign the contract, you should read this thoroughly.