A credit comparison is only meaningful if offers are compared with each other, which agree in the main points. These include above all the term and the loan amount. The longer the loan is paid off and the more money is lent, the higher the risk of the lender. To absorb this higher risk, banks must raise the interest rate.
Even if the duration and amount of the loan are the same, a credit comparison only makes sense if the annualized interest rates are compared. The nominal interest rate is not suitable for a comparison. In addition, borrowers should never rely on the promotional information provided by credit institutions. The lowest interest rates are always based on fictional borrowers with excellent credit ratings. A truly meaningful value can only be set individually.
To determine the actual cost of the loan, borrowers should calculate the total amount before concluding the contract. In this way, loans with different maturities and interest rates are comparable. Higher interest rates can be cheaper over a shorter period of time than lower interest rates over a longer period.
In addition, customers should pay attention to whether a residual debt insurance is included in the interest cost or not. If such an insurance is obligatory for the taking up of the loan, the bank must incorporate the costs into the annual percentage rate of charge. On the other hand, if this is not the case, the residual debt insurance charges must be paid separately if such insurance is taken out.
Who wants to compare concrete loan offers, should also pay attention to how the bank handles this request. When applying for a loan, the bank usually asks Schufa for its creditworthiness. A loan request is stored in the Schufa for one year, can be viewed by other banks for up to ten days and have a negative impact on the Schufa Score. In this way, borrowers who carefully inform themselves in advance can end up even worse off: Due to the lower score, the interest on the other loan offers more expensive.
Better is a condition request, which is deleted within a few days and has no effect on the score.