Installment payment vs. Consumer Loan!
More and more often, especially electronic markets offer a cost-effective installment, already from the first euro. If the credit is insufficient, so all kinds of consumer goods can still be purchased. More and more often Germans finance fun products that are not needed to survive on pump. An alternative, of course, would be a normal consumer loan from a bank. We discuss where the differences are and which method is advisable.
Options: Mail order companies, furniture stores and electronics stores have been offering favorable installment payments for a long time, and now many online shops are also being added. Often, the 0-percent financing is advertised. Alternatively, there is the installment loan through banks to finance consumer goods.
Solution: In the following, we will discuss in detail all important facts and differences.
Consumer loan as an alternative
Of course, even though Consumer loan is also a form of finance, consumers are often better off doing so. Anyone who applies for a cheap loan from an online bank will be checked by the bank financially. With the help of a credit check at the Credit bureau, loans are ultimately only awarded if the borrower can actually repay them. The financings offered by the trader lure the financially weak into the debt trap, especially through the rather loose award criteria.
Installment Loan often as a first step in the cost trap
Consumer advocates in Germany have been criticizing the emerging trend in installment finance for many years. Because many Germans pat on too many purchases on installments in the debt trap. The many small installments are quickly lost sight of and often more purchases are made than can be borne by the income. The often very aggressively designed advertising around installment financing, often leads to success especially in young people.
Even if people like to advertise with the so-called “0 percent financing”, there are often hidden costs. Especially if an asterisk indicates additional conditions behind the advertising offer, these should be carefully studied. Often often fall to sensitive interest, which can only be served by a debt rescheduling.
Because of you, is loan for a consumer good actually necessary?
Regardless of whether a consumer loan or financing at the dealer, you should always ask the question of whether buying on the pump really important. Many loans are always associated with risks that have already driven many people into economic ruin. A simple self-control is to name all open credits. Do you get all liabilities, with open total and remaining time straight away? If you have problems here, you should refrain from further loans.
Conclusion of the editorship
It is important not to be influenced by advertised 0 financing. In the small print you will often find hidden costs such as a residual debt insurance, which can be from a favorable installment an expensive fun. Anyone who knows exactly about their finances and actually gets a 0 percent financing, can access without hesitation.
Pro: The 0 percent financing is done quickly and without extensive checks
Cons: The pro can also become a contra-dive because lenders are unaware of other financial obligations that do not protect consumers from themselves.