September 11, 2019

Expensive credit: Now the disbursement interest attracts properly

Discretionary interest rates

Discretionary interest rates

The discretionary interest rates are rising across the board, making account surpluses even more expensive than they already are. Experts expect borrowing rates to reach a new level this year. Bank customers should therefore consider rescheduling more than ever and pay attention to the most favorable interest rates when selecting a checking account.

Large bank raised the borrowing rate

Large bank raised the borrowing rate

A large bank raised the borrowing rate by 25 basis points at the beginning of the week. The higher interest rate initially does not apply to all account rates, but comes into force immediately. Another well-known institute raised the interest rate by 3 percent. The hope for a relent of the banks and more favorable overdraft credits is thus finally dwindling.

The independent HMF Financial Advisory Service estimates the average interest rate on capital repayment loans at 11.29 percent pa For comparison: the CEB’s key interest rate for short-term money lending is just 1.0 percent a year. Banks are also able to refinance disbursements on the overnight deposits of other customers: On average, institutions pay around 1.1 percent interest here, according to HMF.

Consumer advocates have been criticizing banks

Consumer advocates have been criticizing banks

Consumer advocates have been criticizing banks’ interest-rate policies for a long time and demand (in part) a statutory cap on overdrafts. In the room there is a variable interest rate, which is composed of the base interest rate and the statutory default interest. In this case, account surpluses should currently not cost more than 6 percent interest a year.

Of these, the actual conditions are almost always light years away. Particularly dangerous are disbursements with staggered interest rates, which are used by more and more banks. The debit interest for overdrafts of up to € 500 or € 1,000 is still comparatively low. If the balance increases, however, a much higher interest rate applies for the entire outstanding balance.

Bank customers should refrain from a permanent use of their MRP account. The interest rates can quickly add up to several hundred euros a year. If you can not compensate for the debit balance of your account from your current income, you should look for a loan rescheduling. With a favorable installment loan, the interest cost can often be significantly reduced without the monthly burden increases significantly.

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