Before borrowing a new car or buying a property, a credit comparison makes sense. All banks have instalment loans on offer to find the right loan option, especially if clients are looking at the loan’s effective interest rate. With our credit comparison calculator, you can always calculate the best interest rate and compare loan providers directly online.
Effective interest calculation according to legal requirements.
Banks are required by law to specify the effective interest rate. According to the provisions of the Civil Code and the Price Indication Regulation, credit institutions must include in the calculation of the annual percentage rate of charge all costs incurred in connection with the borrowing. Processing fees and other costs must be included in the calculation. In contrast to the effective interest rate, the nominal interest rate is the interest rate on the basis on which the rates for a loan are calculated, which is not meaningful in a cost comparison.
A shorter loan term reduces costs
The decisive factor is that a credit comparison always compares loans of the same amount and the same duration. The lower the annual percentage rate of charge, the better the rate of the loan for the borrower. Be careful with the fine print: Some providers link the amount of the interest rate to the creditworthiness of the customer.
If the credit rating is assessed negatively, some banks charge a higher loan interest due to the increased risk. It is therefore worthwhile in all cases, first, make a credit comparison to find the cheapest provider. Shorter maturities have a positive effect on the level of the effective interest rate because if the loan amount is repaid within a shorter period, the borrower incurs lower costs.
With the online comparison calculator you play it safe, simply set the loan amount with the desired duration and use. Then the optimal interest rate for the given offer is calculated. Valuation information from various credit providers also simplifies credit comparison. As an example, the specification of a loan of 5000 euros.