Many consumers in Germany know the situation: the washing machine is suddenly broken and must of course be quickly replaced, so that in one fell swoop between 400 and 800 euros is due. In most cases, the purchase price is raised by using the disposition credit. However, it is precisely this amount of credit available on the current account that results in the checking account subsequently remaining in the negative not just weeks or months, but years.
The main reason is that there is no obligation on the part of the account holders to reimburse the claimed credit line until a certain point in time. Thus, the negative balance of accounts is becoming a habit, which is of course financially an absolutely negative point. In worse cases, it can even happen that the repayment credit is used more often and to a greater extent, so that ultimately even an over-indebtedness can be the result.
Installment loans nowadays considerably cheaper than scheduling loans
In particular, if the situation described above occurs, the discretionary loan is thus not only short and to a lesser extent, but instead long-term and claimed with a few thousand euros, an installment loan can be the much better alternative. First of all, installment loans are available at a significantly lower interest rate than out-of-pocket loans. For example, anyone who uses his current account for an average of 2,000 euros a day should better repost the amount into a installment loan. Due to the low interest rates, it is possible without any problems, depending on the debit balance on the checking account between 100 and even save up to more than 1,000 euros a year in interest. This is the result of a current sample calculation of the consumer portal.
Savings potential for installment credit is enormous
Who takes his current account or the disposition loan made available, for example, on average, with 4,000 euros, which currently pays in the nationwide average for annual interest of around 400 euros. The nationwide Dispozins is on average namely still just under 10 percent. If, on the other hand, you opt for an installment loan that can be obtained, for example, via the consumer portal at an average interest rate of just slightly more than 2.5 per cent, you only pay around 100 euros. In this respect, the savings potential in this example is not less than about 300 euros per year.
Installment credit can also be used to reschedule other loans
Of course, the installment loan can not only be used to replace an expensive credit line. Instead, many current consumers see themselves in the situation that they may pay for one or more existing installment loans, perhaps a now overpriced interest rate of 8, 10 or more percent. As with real estate loans, interest rates on installment loans have fallen significantly in recent years. Therefore, it makes sense in such cases to replace the relatively expensive installment loans with a new consumer loan, which is certainly equipped with a lower interest rate.
Pay attention to the appropriate monthly rate
Regardless of whether you are borrowing a new installment loan to make up for the debit balance on your checking account, or to replace existing installment credits, you should always choose the monthly loan installment to be agreed wisely. For example, it would be a mistake to go close to your financial capacity so that the monthly loan installment may be unsustainable at the first unforeseen financial expense. Therefore, it is important that you can really carry the credit rate well.
A big help here can be the income and expenditure account, which gives you an overview of how much of your monthly income on average actually actually freely available. The loan installment that you then agree on installment credit must in no case be higher than this freely disposable income. Most experts even suggest that after deducting the monthly loan installment from disposable income, there should still be a cushion of at least 100-200 euros a month.
After the checking account balance, do not slip again into the minus
Another important tip, which in turn concerns the rescheduling of the disposition credit or debit balance on the current account in a installment loan, is that you do not fall back into old habits after clearing the current account, and use the repayment credit practically after a few weeks. It can therefore be helpful that you agree with your bank that the disposition credit on the checking account is either completely canceled or at least significantly reduced. In this case, you must be aware, however, that the bank may then no longer allow even the smallest overdrafts of the checking account.
However, this measure is important in any case, because after you have made a rescheduling using a installment loan, it is of course extremely counterproductive, if you still use the repayment credit then again. In that case you would have more debt than before and the financial burden would be higher, so that the whole purpose of debt restructuring would have been reduced to absurdity.
Find the appropriate installment loan by means of a comparison
The only question that many consumers will probably face in the context of the situation outlined above is how to find a cheap installment loan. This question is very easy to answer, because the numerous consumer portals on the Internet allow a comparison of offers. Therefore, it is usually within a few minutes possible to make a comparison to find the cheapest loan offers. However, remember that rescheduling only makes sense if you subsequently pay a lower effective interest rate than you did before.