Tricks of the banks: Too poor to save - so you get a fair credit

column

Ten percent negative interest on a installment loan, wow! This advertises the credit broker Smava.

Many journalists called me to ask what I think about it: lending money and receiving money as a reward - can that be (reputable)? A colleague at "Finanztip" was so curious to do a self-experiment. Result: He did not get the loan, despite decent credit rating.

At the end of the day, loans with a good credit rating are cheap in Germany. But credits with negative interest do not pay off of course - but only if a little money from the marketing pot is redirected to finance the loss. Of course, not everyone gets a loan like that. Stop a special offer.

A special offer that does not even stand up to the classic supermarket test. In the supermarket, such offers must be available for at least a few days and for all interested parties. Smava boss Alexander Artope, who makes the minus-ten-percent loan offer and has been advertising negative rates for years, has refused to comment on the chances of success this week to win a loan agreement. Smava admitted that in the past two years, they have not even awarded one percent of their credits with negative interest rates. A classic lock offer.

Negative interest rates are therefore rather unrealistic. Closer to the reality came our rejected colleague. Instead of a commitment for the 1000-euro loan with minus ten percent interest, he received from Smava an offer of Santander Bank with 6.95 percent interest. Only when he raised his borrowing requirement to 2000 euros on the portal, the comparison suggested another bank with a more appropriate interest rate: just under three percent.

Granting loans at high interest rates is still a flourishing business for banks. Because many citizens regularly need a loan to handle any major purchases. Because they do not save - or can not save.

One third can not save

The ING delivers depressing figures in a recent survey: just under a third of all households say they can not save at all. In the European comparison of the ING of 13 countries, only Romania outperformed Germany. With rising rental costs, the number of households without savings in this country has even grown from 2017 to 2018.

But what happens to those who have their wallets empty and who need credit?

The answer is expectable: they are bad. The Hamburg-based IFF Institute has just under 100 credit counseling led for the financial turnaround, in branches of savings banks, and Volksbanks, at Deutsche Bank, Commerzbank, but also at Targo and Santander. The testers deliberately came too late to the appointment and told the banker that the car had a breakdown and whistle on the last hole or threatened a nursing care in the family or the woman was pregnant.

Standard program to the detriment of the customers

To the astonishment of the testers such foreseeable risks with loan repayment played in the following counseling discussions no role. Instead of responding to these special needs, the banks usually reel in their standard program - and risk further debt to customers.

This was most noticeable in Santander. Regardless of the question with what the test customers came, employees of this bank tried to sell the customer with the credit controversial debt insurance. Santander did so in ten out of eleven counseling sessions. Eight times the consultant had put pressure to complete the expensive insurance. Four times, the insurance was even presented as a condition for the loan, the IFF.

Santander denies on demand that the test is representative of their own consulting practice. The descriptions from the tests "do not meet Santander's business expectations, so we will focus even more on quality control".

"Debt career is programmed here"

Obligatory, but rarely under pressure, bankers at Commerzbank and Targo also tried to sell residual debt insurance. Together with the high interest rates, individual credit burdens of more than 20 per cent came out in isolated cases. Mind you: not only at Santander, but also at Targo or individual savings banks. Dirk Ulbricht, head of the IFF, sums up in shock: "Basically, debt careers are being programmed here."

One can formulate that even more sharply. The responsible executives of these banks are tight-lipped on the bottom of their pants, regardless of whether this is done by the German supervisory authority Bafin, which is responsible for the 1500 smaller banks, or the ECB, which is responsible for the supervision of industry players such as Santander, Targo, Commerzbank or Deutsche Bank. Such a credit counseling is unbearable.

Especially in the branch, in which a personally comprehensible consultation is possible. That the missing, at the same time, but residual debt insurance policies are offered nationwide, put the industry in a bad light.

What is the problem with these insurance companies? First, they are very expensive and the contracts are full of disclaimers. The great interest of the banks in this insurance can be seen in the high commissions of often over 50 percent. It also reduces the risk of default, without the banks taking less interest.

Remaining debt insurance is reversed in the UK

In the motherland of capitalism, in the UK residual debt insurance policies are no longer permitted when selling the loan. And British banks, under pressure from local regulators, have had to reverse £ 30 billion of residual debt insurance over the past decade. This means that the customers have got back the money they have paid for the policies.

So far, the German policy is still not. So what can customers do that are not protected by lawmakers, who see no savings, and may need a loan in the foreseeable future?

In principle, they have three options. The first and best thing is, but again to make a savings effort and two years to put aside one to two monthly income, for example, by saving money in electricity and gas providers, the mobile phone tariffs, checking account and car insurance. A monthly plus is also a prerequisite for paying back a loan.

The second option is to respond to much-needed spending, at least with the lowest possible installment loan. Branch banks rarely make the best deals here. In addition, customers of credit portals get their loans in the trend two percent cheaper offered than the average of all customers, so the evaluation of the Bundesbank. An example: four per cent instead of six per cent, which makes for a 10,000 euro loan over seven years a whopping 789 euros.

Some people choose in emergency and time pressure, the third variant and concludes an installment loan, without first comparing offers. This is the most expensive and worst variant.

So they will get rid of a bad credit

How expensive and how bad, that is easy to show in this particular case: We have helped a reader to repay her bad credit over 17,000 euros. The result: you save 5700 euros!

This was only possible because there is now a way to get rid of a once-complete residual debt insurance. You have to know that banks charge the insurance money at once and pay for the loan. In the case of our reader, that cost about 3,000 euros. So, to get paid 17,000 euros, she suddenly had to raise a loan of 20,000 euros.

Thanks to recent EU rules, you can now repay a installment loan at any time without high fees, so move to another bank. There is at most one early payment decision, of one percent of the remaining debt.

In the rescheduling can be terminated in any case, the residual debt insurance (sometimes it works without rescheduling). Our 17,000-euro customer initially saved 2400 euros for the remaining debt insurance for the remaining time. In addition, you could more than halve the interest rate: from 6.95 percent interest to 2.5 percent. As a result, and because she has paid off the loan at the same rate so earlier, she saves another 3300 euros.

Do it!