In the steadily growing market of loan providers, the most important comparison values when comparing loans between two providers are the loan conditions for their respective loan offers. These loan conditions, also called loan terms, are generally all legal and financial conditions attached to the granting of a loan. They set out the rights and obligations for both lenders such as banks and borrowers.
Unlike the general loan terms, the loan conditions refer only to the framework conditions of the loan, not to all other legal relationships between the two parties. Which points are addressed in the loan terms depends on the respective lender.
- interest rate,
- disbursement rate,
- duration of the fixed interest period,
- start of repayment and the corresponding repayment rate,
- amount of commitment interest (Bereitstellungszinsen) and
- the total of any processing fees.
The interest rate indicates by how many percent the amount of your loan increases within a certain period of time. If you borrow 100 euros from a bank and its loan conditions set the interest rate at 1.5 percent per month, you will owe 101.50 euros after one month. The disbursement rate, also called disbursement amount, is the borrowed sum plus interest (also loan interest) plus any incidental costs that may arise for the loan. It therefore denotes the actual total amount that must be repaid by you. The term "effective annual interest rate" is also often used for this.
The MAXDA loan conditions and a representative example can be found here: MAXDA conditions
Which additional costs are included in the loan conditions?
Incidental costs that may arise when granting a loan can include, for example, processing fees, notary fees or appraisal fees (appraisal fees occur when the value of a property or other asset must be estimated). The fixed interest period in the loan conditions determines how long the loan interest remains the same (i.e. fixed) and from when it may be recalculated by the lender according to the current situation on the financial market.
The start of repayment specifies from which date the installment loan must be repaid and the repayment rate describes the installments in which this repayment takes place. This determines both the number and the amount of the installments. The amount of the installments can also affect the loan term. If the borrower can pay higher installments, the loan will be repaid faster and the term will thus be shortened. The commitment interest (Bereitstellungszinsen), which also count as the incidental costs described above and whose amount must also be specified in the loan conditions, are required to allow the lender to refinance and to secure themselves until the loan is repaid. As a rule, they are only charged if a longer period of time elapses between the conclusion of the loan agreement and the disbursement of the funds to the borrower.
By law, the lender is obliged to keep the entire loan amount available at all times during this period. It therefore cannot be profitably invested by them, and as compensation the lender charges commitment interest, which is included in your disbursement amount.
Average loan conditions
Individual loan conditions vary greatly between lenders and according to the financial situation. Most sub-conditions fluctuate, viewed over a larger range, around an average value. Interest rates are not so consistent — they differ greatly and also depend on the borrowed sum and the borrower’s security. The installment amount and number vary depending on the borrower’s personal needs and the lender’s conditions.
Some lenders allow repayment staggered in up to 84 monthly installments, depending on the amount borrowed. The amount of incidental costs, which ultimately affect the disbursement amount, also depends heavily on the lender. Notary fees alone can be recorded in the loan conditions at around one percent of the borrowed sum.
Lenders such as banks are legally obliged to specify all incidental costs of a loan in the conditions — so you should not be surprised. A fixed interest period is possible for three, six or 12 months, depending on the lender. Some lenders fix the interest for the entire repayment period, which offers special security.
For the borrower it is always advantageous to compare different loan offers or loan conditions. Because comparing providers can save a lot of money. Therefore, submit a loan request to different providers for an optimal loan comparison.
Our loan conditions
We place particular emphasis on fairness — your trust is important to us, so we make an effort to give you a good feeling when you apply for a loan with us. Our interest rate is — regardless of the term of your loan — from 3.99 percent. This interest rate is fixed for the entire duration of your repayment according to our loan conditions and does not fluctuate with developments in the financial market. For you, this means that you already have a clear overview of the costs of the loan at the start of your repayment and will not be surprised by changes in the financial market that cause your interest rate to suddenly rise.
We have set the start of repayment to four weeks after receipt of the funds. Your repayment therefore begins on the 1st or 15th of the respective month. The amount of the monthly installments is tailored individually and fairly to your needs and cannot be stated uniformly. The installment amount depends heavily on your own creditworthiness, i.e. how high your income is and how much of it you can use for the monthly installments. Particularly good creditworthiness always helps the borrower to get a loan approved. Creditworthiness is usually also visible to lenders such as banks via a query at Schufa. General creditworthiness can already be checked via Schufa.
An immediate repayment, that is, the one-time repayment of the entire loan plus incurred incidental costs, is also possible with us at any time and without restriction according to our loan conditions.
Since we want to help you quickly and fairly and know that money is often needed at short notice, we process your loan application or loan inquiry unbureaucratically and within a short time. This keeps the incidental costs pleasantly low for you and allows us to negotiate individual loan conditions with you. With us everyone is treated fairly and receives an installment loan that is tailored to their personal needs as far as possible.
If you have further questions about our loan conditions, the meaning of individual contract components in general, or personal adjustments of our loan offers to your needs, contact us. We will be happy to help you.