Credit is equal to credit, or not? Far from it! For this reason, you should think about the loan that is right for you. In our loan comparison, you specify the loan amount, the provider gives you an interest rate and a repayment rate. You then take out the loan – or not. However, lending is not quite that simple. This is only the first step to your new loan. It takes a little more until the credit is approved and finally credited to your account.
Once there is the sort of credit with which you can fundamentally hire or. Be able to pay whatever you have in mind. These are loans without a fixed purpose and are thus available for free use. You can use these pure consumer loans, for example, to balance your overdraft facility, to buy a new TV or to finance your next vacation. In the use is usually prohibited the use of real estate financing. However, this has a simple reason: consumer loans are usually up to 50.000 Euro (we have banks with higher sums in the loan calculator) and are granted without a land charge. Since real estate loans are usually significantly higher in the loan amount, most banks require for this also a corresponding land charge security.
In addition, there are still loans that have a fixed purpose and are bound to this also. These are for example
- Car loans / motorcycle loans
- Debt rescheduling loans
- Modernization loans
In addition, a distinction is made between loans with creditworthiness-dependent interest rates and loans with creditworthiness-independent interest rates (so-called fixed-rate loans). Here you need to weigh up which loan is really suitable for you in the end.
Credit expert tip: Look around in our credit comparison – here you will find in any case to the mentioned credit types always the very favorable credit offers. You can use the loan calculator as often as you wish. It remains free of charge and 100% non-binding for you. However, please note that you will only receive your individual interest rate after you have applied for a loan. Also this credit application is 100% free & non-binding for you!
Four loan types and what makes the difference
As mentioned above, the most favorable loans can be filtered out for each of four loan types. Each of these types of credit has its own advantages and disadvantages and certain peculiarities in the regulations. Below we present some of the loan types in more detail.
- Car loan and motorcycle loan
- Consumer or online loan
- Loan for debt restructuring
- Modernization or renovation loan
1) Car loan
A new car is often an expensive pleasure. Depending on which vehicle you choose, the cost can quickly run into the mid-five figures. If it's a large family car, a fancy sports car or a modern electric car, it can also quickly become expensive to.
Only a few people can raise such a sum at once and pay for the vehicle in cash. However, this would actually be the most sensible option when buying a car. If you act as a cash payer, you will usually receive additional discounts and rebates. However, since many consumers finance their cars, many car dealers nowadays work together with a contract bank, which provides car financing directly on site. But does it really make sense to resort to financing directly at the dealership? Would not be a car loan comparison necessary to find the best offer?
With a car loan this is possible. You take out your car loan, receive the full purchase amount of the vehicle and thus pay for your vehicle in one lump sum. As cash payments, it only depends on your negotiation skills how much discount you can negotiate for yourself. At the car loan interest, however, you have saved in any case with our comparison. But before you get the loan disbursed, the disbursement is subject to different conditions.
On the one hand, the granting of a car loan is tied to a specific purpose. This means that you can use the money from this loan only for the purchase of the vehicle. The purchase must be subsequently evidenced by a contract of sale.
In most cases, the lending bank also requires the vehicle title of the financed vehiclet as collateral. In the meantime, you will find in our loan comparison but also numerous banks that do without this additional security.
Advantages and disadvantages of a car loan
Car loan advantages:
- since there is additional collateral, interest rates are often more favorable than with a pure consumer loan
- the credit gives you the opportunity to act as a cash payer when buying and thus negotiate more favorable purchase conditions
Car loan disadvantages:
- the loan is earmarked and cannot be used freely
- many banks require as additional security the vehicle title until the loan is completely paid off
- in the case of used vehicles, the lender may attach certain conditions to the granting of the loan (e.g., the car may not be used for a longer period of time).B. maximum vehicle age)
By the way: In principle, the same advantages and disadvantages apply to the motorcycle loan as to a car loan. The only difference is the fact that the motorcycle loan finances a two-wheeler and the purchase price is usually lower.
When choosing a loan, it is also possible to distinguish between a full repayment (classic annuity loan) and a balloon payment (more on balloon financing). A full repayment loan is paid off in constant monthly installments until the loan is repaid in full. The variant with a balloon installment comes with significantly lower monthly payments. At the end, however, there is a large final installment. This is usually chosen so that the balloon rate corresponds to the expected value of the vehicle at that time. This gives you the opportunity to trade in the vehicle without losing much money at the dealer in order to purchase a new vehicle from the dealer.
2) Consumer or online credit
The classic consumer credit (also known as pure online credit) is not tied to a fixed use. With the money from an online loan you can do what you want in the end. Classic reasons to take out a consumer loan are, for example:
- A wedding (with a wedding loan) or other large family celebration that needs to be paid for
- The purchase of a vehicle when a car loan is not an option
- The financing of an education
- the purchase of technical equipment
- the purchase of furniture (z. B. with a furniture loan)
- the purchase of a new kitchen (z. B. with a kitchen loan)
- the settlement of an open overdraft facility
- the payment of a trip (z. B. with a vacation loan)
Especially with a classic consumer loan, it is important to think about this beforehand. Do you need the loan at all? If yes, in what amount? What can you actually afford? The disadvantage of the consumer loan is occasionally worse interest rates. By a second borrower or by additional collateral, you have here partly the possibility to reduce the interest rate a little bit. You are also welcome to read our 9 tips on how you can reduce your borrowing costs.
The advantages and disadvantages of consumer credit
Online loan advantages:
- there is no fixed purpose of use
- You can use the money immediately or use it as a reserve
- a credit decision is made very quickly in most cases
- the interest rates are significantly lower than those for an overdraft facility
- can serve as a "fallback option" if, for example, a car or motorcycle loan is not granted
Online loan disadvantages:
- compared to a special-purpose loan, the interest rates are often higher
3) Loan for debt restructuring
Another option is to take out a loan for a debt restructuring. Of course, such a debt rescheduling only makes sense if the conditions of the new loan are better than those of the old loan. Even with a good credit rate, a debt restructuring can be useful. If, for example, you have a shorter credit period with a new loan, you will save many costs in the end and have also repaid your loan more quickly.
It is important that the new debt rescheduling loan has a lower effective interest rate. In addition, you should consider possible additional costs of the loan redemption. If there is no possibility of a special payment or free redemption in the original loan agreement, it can quickly become expensive due to early repayment fees, which would make the rescheduling no longer worthwhile.
4) Modernization loan / renovation loan
A modernization loan falls into the area of construction loans, but is not a classic construction loan. Within the framework of a construction financing, a complete house or the purchase of an apartment is financed. With a modernization loan you finance only a planned modernization or renovation.
For this reason, there is no entry in the land register for this type of loan. However, a modernization loan is very much earmarked, so you have to prove the use of the borrowed money accordingly. The classic modernization loan usually comes with a significantly lower interest rate than the consumer loan for free disposal. However, it is aimed only at real estate owners. This means that you must prove that you own an apartment or a house to obtain such a modernization or renovation loan.
The advantages and disadvantages of the modernization or renovation loan
Modernization loan Advantages:
- no entry in the land register is necessary
- lower interest rates than with a consumer loan
- sometimes significantly longer loan terms possible
- it is possible to make modernizations that reduce running costs (z.B. electricity and heating) significantly lower
- Parts of the loan installment can already be financed by the corresponding savings
Modernization loan disadvantages:
- clear earmarking of the loan
- Loan is granted only to owners of real estate
credit with or without creditworthiness-dependent interest
In our loan comparison, there are numerous offers with interest rates that have "from-to" statements. These are so-called creditworthiness-dependent interest rates. This means that the lender checks your creditworthiness and determines the interest rate according to the respective result. The better your credit rating, the lower the interest rates will be.
The higher your income and the lower your monthly expenses, the greater the security for the lender. The latter must weigh up in advance how certain it is that the money lent will also be paid back again. That's why, in the case of interest rates based on creditworthiness, the interest rates also sometimes go very far below the interest rates of fixed-rate loans. However, this only applies in the case of top ratings in terms of creditworthiness and account rating.
Interest rates independent of creditworthiness never reach the lowest offers of interest rates dependent on creditworthiness. Instead, they tend to be in the lower-middle range of interest rates. In return, they are completely independent of your credit rating. This means that the top earner here pays an interest rate just as high as the low earner.
This, of course, means a higher risk for the lender. Some of the risk is offset by a higher average interest rate. The credit check as such is carried out with creditworthiness-independent interest rates but usually much more intensive and stricter. This is to further minimize the risk for the lender.
However, you will not find glaring interest rate differences in our loan calculator. Of course, the "promotional interest rates" look very tempting; if only everyone would still get them. Banks are therefore encouraged to give a representative example of their loans. These are those loan terms at which 2/3 of the customers got the loan from the respective bank. If you compare this interest rate for a creditworthiness-dependent loan and a fixed-rate loan, you will see that the interest rates are very close to each other!
| Loan type | Advantages | Disadvantages |
| depending on creditworthiness | – Lower interest rates with a good credit rating – even if you have a poor credit rating, there is more of a chance of obtaining a loan |
-even with mediocre credit rating, interest rates are comparatively high |
| creditworthiness independent | – Basically constant credit rating – already in the offer phase clearly plannable costs |
– here, there is more of a risk that the loan application will be rejected due to insufficient creditworthiness |
Borrowers should choose a creditworthiness-dependent loan if they have a very good or even a borderline bad credit rating. For anyone with a moderate income, loans with no credit rating are best suited for. Here the interest rates are usually lower than most creditworthiness-based interest rates for normal earners.
Conclusion: High savings potential with many loans
When it comes to credit costs, even small details can make a big difference. When buying a car, for example, it is very important whether the vehicle is financed with a consumer loan or a car loan. The same applies to a modernization or renovation loan. However, there are also situations in which you are barred from accessing each type of credit. This applies, for example, if you want to buy a used car, but its age and condition do not meet the criteria of the potential lender. Then the consumer loan is the perfect fallback option.
In any case, you should make comparisons before concluding a loan agreement. This is also quite advisable between the different types of loans. This is the only way to ensure that you end up taking out exactly the loan that is best for you over the entire term of the loan.