Fixed interest rate loan

Anyone interested in a loan must of course also deal with the corresponding interest. With long-term loans in particular, it is very important to keep an eye on interest rate developments in order to keep the costs of the loan manageable.

The fixed rate loan makes the costs manageable

The fixed rate loan makes the costs manageable

Anyone who decides to take out a fixed-rate loan already has a precise overview of the current loan costs and the costs until the loan is completely repaid when the loan contract is concluded. With the fixed-rate loan, the interest rates for the loan amount are agreed upon when the loan agreement is concluded. This interest is retained until the loan expires. So there are no nasty surprises from rising interest rates for the borrower. However, the borrower can no longer use interest rate reductions in the market for himself through the loan with fixed interest rates.

Fixed rate loan – there are other options to consider

Fixed rate loan - there are other options to consider

If you take out the loan at a fixed interest rate, you can save money compared to variable interest rates through fixed interest rates. However, other options can result in cost savings over variable loans. For example, if you agree on a free special payment or free special repayments, you can further reduce the credit costs. Many banks have this option paid dearly for a loan with a fixed interest rate, in order to generate additional income for the loan.

A fixed rate loan can also refer to credit rating

A fixed rate loan can also refer to credit rating

Not only fixed interest rates over the entire course of the contract – interest rates that are independent of creditworthiness can also constitute a loan with a fixed interest rate. This can prove to be very advantageous, especially for borrowers with poor credit ratings. An interest rate for a loan is not least based on the credit rating. Having negative creditworthiness always means not getting the cheap advertised interest rates.

The loan with a fixed interest rate, which is offered by some providers, does not differ in terms of creditworthiness and all applicants can therefore obtain their loan regardless of creditworthiness at favorable interest rates. Anyone looking for this loan, however, must do thorough research, because most banks continue to link the interest rates on loans inextricably with creditworthiness.

Loan for start-ups – finance your dreams

Especially in the start-up phase, start-ups do not have much equity to get their business going. It is normal that a loan for start-ups is often considered. There is simply too much on the investment list to be able to do it all with equity. There are also the monthly fixed costs that also have to be paid.

Credit from the house bank

Credit from the house bank

Start-ups can turn to the house bank for a loan. Even if they receive grants, the house bank must be visited if a loan is to be granted to start-ups. The bank decides whether an application can be approved or rejected. The bank knows the personal circumstances and the customer, so that only a good basic concept has to be presented, which will convince the bank to grant a loan.

Start-ups can benefit from grants and grants. If you want to take out a loan. The funding agency assumes the risk for the entrepreneur if he can no longer repay the loan. These payments are then taken over in part or in full. The so-called house bank principle is then used because the money comes from the house bank and not from the place where the funding is given.

For example, grants and grants can be asked from the federal and state governments and local authorities. KfW Bank is a very popular place. Not much equity is needed to build a livelihood here. In addition, the applicant does not have to begin repaying the loan until the second year after the application is made, so that there is enough air before payments can begin.

What are the requirements?

What are the requirements?

The concept that has to be presented to the bank must be valid. The bank must be as convinced of the concept as that of start-ups, otherwise no loan will be granted to start-ups. Collateral is always a top priority at banks, so it is important to have a regular income. This kind of security can only partially be fulfilled by start-ups, because they earn money, but they always have it in irregular amounts.

However, if you can improve your creditworthiness, you have a good chance of getting a loan. A guarantor can help to improve creditworthiness in order to obtain a loan. A guarantee is very popular and is accepted by every bank. This is because the bank basically has two instead of one borrower. The guarantor uses his income to secure the loan. This can be a relative, a friend or a business partner.

If you cannot find a surety, you may have insurance. Pension and life insurance are also recognized as security. This only has to have a high surrender value, at least as high as the loan amount, so that it can be used. As soon as one of the collateral has been accepted, a business start-up loan can be taken out.

Credit despite receiving sickness benefits

Those who have to live with a long-term illness cannot go to work and have to live on sick pay. Sickness benefit is a wage replacement benefit that cannot be attached by creditors. Can a loan be taken out in spite of sickness benefits under these circumstances?

It will be difficult, but it is not impossible

It will be difficult, but it is not impossible

The fact is that you will not be able to get credit from your house bank or other traditional banks despite receiving sickness benefits. The lack of income and the fact that sickness benefit cannot be seized cause the rejection. You can only turn the tide with a second applicant. The additional applicant must be solvent and have a good income.

But even outside of the second applicant, there is an option to implement the loan despite receiving sickness benefits.

The consumer loan

The consumer loan

So there is still consumer credit, which sees the conditions for a loan a little more relaxed. There is no need to provide proof of income here, but it is sufficient to state when applying that you are receiving an income. Roughly speaking, sickness benefit can also be seen as income. And so you would not make a false statement when applying.

The fact that everything is seen so loosely with a consumer loan is because the consumer loan is principally earmarked. So you can only finance the things you want to buy. The money is not freely available and the items purchased are considered security. If you are in default of payment, you have to expect that the items will be attached by the bank.

This is how borrowing works

This is how borrowing works

Many retailers can take out the loan as a consumer loan despite receiving sickness benefits. They offer targeted financing for their items and also point this out to customers when making a purchase. If you choose the financing, you will be rewarded with low interest rates and pleasant installments. However, there is no choice regarding the loan. You have to take the offer that the dealer has ready and you can only take out the consumer credit there. Despite all this, the length of the repayment phase gives you the option of choosing between different terms.