At the present time, many loans are fixed price loans. These can bring some essential benefits to the borrower, but it is not always worth taking such a loan. We show you exactly what this type of loan is and how to select the right loan for you.
The fixed price loan – what exactly is this and how does it work?
In the case of a fixed-price loan – which is also referred to as a credit rating- independent loan – the bank sets interest rates that are not influenced by the creditworthiness of the borrower. This means that the amount of the loan interest incurred is not calculated from the customer’s financial resources.
Because, for example, if an applicant offers a lot of collateral, has a fixed income, and is also financially secure, in many cases he will receive a much lower interest rate on a normal loan than someone who can barely provide collateral to the bank.
But with fixed-price credit this is exactly the other way round:
Here, the creditworthiness of the applicant is completely irrelevant if he wants to take out a loan. It is of primary importance to the bank that the borrower has fulfilled all the crucial criteria for awarding the loan. Of course, it is also an advantage here if the creditworthiness is in order. However, the bank still offers him a fixed interest rate that has nothing to do with the credit rating. How high the interest rates are for him, depend on the loan amount and on the term, which the customer agrees with the bank.
To whom is a fixed price loan aimed?
Fixed price credit is a purpose-based loan that can be used in a variety of ways. For example, you can use it to make an urgent purchase, settle an open bill or even to finance a trip with it.
The fixed price loan can thus be used by any person of legal age who has a fixed income and can pay the installments safely.
The many advantages of a fixed-price credit comparison – why is it worthwhile?
There are many reasons to settle for a settlement before applying for a fixed-rate loan from a bank. Because today there are a large number of banks, savings banks and credit institutions to choose from. They all offer completely different terms and conditions regarding both the interest rate and other charges. To perform all these offers manually would be hardly possible for laymen.
Therefore, it is much more convenient to simply perform an automatic comparison over the Internet for a quick overview.
All costs, which are summarized in the APR, are immediately obvious in this way and you only have to choose a suitable provider that meets your own requirements.
How to apply for a fixed price loan
Once you have decided on a particular loan offer for the fixed price loan from a bank, you can be forwarded directly on the Internet on the appropriate website and there request all the required documents.
Often it is also possible to regulate the most important formalities online and submit some forms electronically. Nevertheless, most banks usually require copies of proof of income or conduct a credit bureau check.
The customer must provide both regular personal information as well as the desired amount of credit and the term of the fixed-price credit at the time of application. It is also necessary to provide information on living conditions, income and employment. Only then can the bank get an idea of whether the borrower is sufficiently solvent and can repay the installments safely.
As a rule, the examination of the submitted documents takes several days – unless it is an emergency loan. In this case, the loan amount is often ready a day later. Normally, however, you have to wait several working days or even a week as an applicant until you receive a notification from the bank. In the case of a grant, the payout is in the way and you can soon have the desired loan amount in his account.