Assess the credit applicants’ credit rating
This also includes scoring and the budget statement. It is conceivable that the applicant chooses a short term of only a maximum of 24 months and is a police officer or university lecturer by profession. Then there may be a chance for a loan on favorable terms. But it is also conceivable that no one is granted exactly these conditions, but that they are purely decoy offers. Experience has shown that many loan seekers also accept higher interest rates once they have made a loan request. Even if the customer asks, it is justified that it has to do with the credit rating. Many banks also offer interest depending on the term.
Borrowers have no chance at all at a low-interest loan
A longer loan term always means an increased risk for the bank and therefore the longer the chosen term, the higher the interest rate. With terms of 72 or even 84 months, the borrowers have no chance at all at a low-interest loan. The highest effective interest rates are required here. While the normal consumer still sees the reason for the increased risk with a longer term, the reason for the credit rating still remains opaque and vague. Bank employees who have been employed by their employer for more than 10 years and can prove a high income of over 2,000 USD also get a loan that is advertised with 4.9 percent, ultimately with a term of 84 months granted only with 11.99 percent.
With a loan of 25,000 USD, this means that, including residual debt insurance, which was also made a condition, a total loan of over 38,000 USD. So 13,000 USD in loan costs. This is 50 percent of the loan amount, which must be paid for the cost of the borrowed money. Loan seekers should always obtain offers from several banks and compare them with one another. It is never the case that the bank with the cheapest promises really sells the cheapest loans. For a comparison, it also makes sense to get an offer from a bank that is advertising from the start with 6.9 percent.