Consumer loans are cheaper. What interest now to expect?

Competition and the struggle for each client are behind the fact that consumer credit interest rates are relatively stable. Only relatively small changes can be observed. And one of the changes that took place in August this year reduced consumer credit to an all-time low.

The average rate for bank consumer loans reached 5.98% per year in August 2019. In a year-on-year comparison, it decreased by 0.82 percentage point. In general, interest rates on consumer loans have long been between 5 and 6% per year.

Since the beginning of monitoring consumer price developments, their average interest rate has fallen by 4.93 percentage points. Data relating to bank consumer credit interest are monitored through an index issued by Broker Consluting. This is a relatively new index, the statistics date back to January 2017.

Broker consulting

Broker consulting

In addition to financial consulting, Broker Consulting also deals with real estate.

The average interest rate of consumer loans is calculated from real bank loans concluded by consultants Broker Consulting and OK POINT branches. The calculation is based on a weighted arithmetic average, where the volume of credit is the most important. This means that the overall result is most affected by higher loans. Conversely, small loans have a much smaller impact.

The interest rate of 5.98% may be surprisingly high for many people. Awareness of consumer credit is largely determined by advertising. In them, however, the individual providers present primarily the lowest possible interest and not the one that the applicants actually receive after the creditworthiness assessment. People may also be surprised when negotiating mortgages. Even in this case, few will get to the lowest interest rate presented.

Consumer loans

Consumer loans

It is worth remembering what consumer loans are. According to the Act, these loans are in the range of $ 5,000 to $ 1,880,000. Especially lower amounts can be borrowed through an online application. Then it is called online loans.

Consumer loans are suitable, for example, for the acquisition of electronics. In the case of a non-purpose loan it is also possible to buy a holiday, a car or a complete furnishing of a new apartment.

These are ordinary loans, which may be either special-purpose or non-purpose loans. It does not have to be a financial product of banking institutions alone. On the contrary, non-bank providers also offer consumer loans. Most of them, however, are usually more expensive loans.

Consumer loans are provided to individuals and should not be used for business purposes. To obtain a loan, the applicant’s creditworthiness and overall creditworthiness must be verified by law. A frequent requirement for obtaining a consumer loan is your own bank account.

Consumer loans also include, for example, American mortgages, building savings loans and financial leasing.