More and more loan providers are aggressively advertising their offers with low interest rates of 4.5 to 9.9 percent. However, an intensive market analysis shows that by no means all customers benefit from these favourable interest rates. In fact, numerous conditions must be met in order to receive even a comparable offer.
In practice, the personal loan business is highly competitive. In most cases, banks only advertise particularly low interest rates if they are so-called shop window prices. This is an interest rate that, due to the high requirements, only a vanishingly small proportion of customers can actually obtain. The large mass of prospective borrowers instead receive a loan with standard market interest costs.
When are favorable interest rates actually awarded?
The amount of interest charged by all banks depends on the creditworthiness of the customer. For this reason, they always carry out a comprehensive credit check after a loan request has been received. This way, the providers ensure that they will get the borrowed amount back from the borrower later on.
Most banks do not only include the monthly income of an interested party in their calculations. In addition, numerous risk factors also play an important role. These include nationality, age, residence status and place of residence. Often even the number of changes of job and place of residence in the past years is taken into account. All factors are combined by the bank in a statistical model and finally result in a so-called credit score. Each provider has an individual model according to which the creditworthiness of the prospective customer is calculated. Below you can find out to whom the favourable interest rates are actually granted in practice.
Eny Finance (4.5 percent)
The small Zurich-based company with just ten employees relies above all on clear communication of its criteria. Nevertheless, only a very small proportion of prospective borrowers meet the largely transparent requirements. In order to receive a cheap personal loan with interest of 4.5 percent, you must have both a clean collection record and an unlimited employment contract. In addition, the cheap loans are only given to employees who receive a minimum wage of 6,000 francs per month. Finally, this interest rate is only considered for loan requests of more than 30,000 francs. This means that only eleven percent of all credit seekers have the opportunity to accept this favourable offer.
BANK-now (4.5 percent)
BANK-now's offer is also aimed at an exclusive social class. The advertised Credit-Now Casa is only available to credit seekers who have already owned their own home for at least half a year. In addition, you must achieve a very high internal score, the requirements of which are not communicated transparently by the provider. For this reason, most homeowners only receive an interest rate between 5.9 and 6.9 percent from this bank. Renters, on the other hand, have to expect an average interest rate of over 7.9 percent.
Cashgate (4.9 percent)
The Zurich-based credit institution Cashgate specialises in leasing and personal loans. However, a loan with interest of 4.9 percent is only available to interested parties with a monthly income of over 4,500 francs. In addition, the low interest rate is only granted for credit requests of more than 20,000 francs and also requires the possession of residential property. As a result, this favourable offer is only aimed at a minority of less than 14 percent of all credit seekers.
Bob Finance (4.9 percent)
Finally, Valora's fintech subsidiary also advertises a cheap personal loan. However, the inexpensive interest rate of 4.9 percent is only available to people with a minimum monthly income of 4,500 francs. In addition, an existing personal loan with a residual debt of at least 5,000 francs must be taken over and a first-class financial reliability must be demonstrated. For this reason, this loan is also only eligible for a small proportion of all consumers.
Only a few receive favourable loans
Our detailed analysis shows that only a small minority benefit from the low interest rates offered by many providers. If you unsuspectingly apply for an online loan from one of the numerous providers, you risk not only a rejection, but even a negative entry in the Central Office for Credit Information (ZEK). This can possibly hinder your future credit applications or at least ensure higher interest rates.
Therefore, use our comprehensive loan comparison.
Our team of specialists offers you secure access to cheap personal loans with requirements that you actually meet. Therefore, get a non-binding and free offer right now.
Download as PDF: Providers are currently tempting you with low interest rates on personal loans.pdf.