A credit for the institution is a desire many people. They want to change their apartment and get a new style. In addition, the home should be comfortable and be freed of any existing old things.
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But only very few today have the money to finance a new institution out of pocket. Here then must be the obligatory credit, which can implement the wishes in action. Corresponding furnishing credits are now awarded by many banks.
But here are many questions, because after all, there are two different options that can be used here. So what does the customer need to know when making such a loan? Which two species are there and which of them is the better choice for each situation?
Two versions – The types of home loans
Home loans are available in two ways. Once as a direct loan from the bank, which can be paid to the own account and once the financing, which is taken up directly at the dealer.
The direct loan is applied for just like all other loans at the bank. One difference, however, is that the bank requires a cost estimate that estimates the value of the furniture to be purchased. Although the customer does not have to prove the purchase at the end, the loan will only be paid out in this amount. If you want a bigger scope, you only have to pay a regular installment loan.
Financing is the indirect form of payment. This is not paid to the account of the borrower, but transferred directly to the dealer. In this way, the goods are paid by him and the customer must now make his installments for repayment to the bank.
Important: Plan the furniture financing in advance
The financing is often much cheaper than direct loans, because these are sometimes even offered at zero percent. However, the conditions are much harder, the here the furniture can even be retrieved, the buyer should be in default.
Where can a direct loan be obtained?
For a direct loan for the institution it is necessary to compare. For this purpose comparison portals can be visited on the internet. Here, the customer gets a quick overview of the key points and especially the different interest rates stand out clearly.
The Santander Consumer Bank
A major provider known both for direct loans and for financing of this type is the Santander Consumer Bank. Here, direct loans are already granted from a fixed interest rate of 3.07 percent. The duration is variable and can be adapted to your own needs. However, the bank requires proof of the amount of the sum, so that an offer for the purchase price must be obtained in advance. The money is then paid out to the account of the borrower.
Erste Bank and Sparkasse
At the first bank and savings bank, all loans of this type are considered installment loans. However, these are given on special terms, because there is at least in the first six months a security that the bank can bring back, should the borrower fall into arrears.
After this time, the furnishings have lost so much in value that a garnishment is usually no longer worthwhile. The direct credit is granted for an interest rate of 5.4 percent. The term can be up to 84 months, the maximum amount is set at 30,000 euros. There are no fees and no prepayment penalty.
BAWAG PSK offers a direct set-up loan for an interest rate of 5.3 percent or more. The amount of the loan depends on the offer made by the borrower to the bank. The term can be set to 120 months, but here an account maintenance fee of 9.90 euros per month must be paid.
For this, the bank waives all other fees, but insists on a prepayment penalty should the loan be repaid early. BAWAG PSK also secures the right over the entire term to return the furnishing items to pledges if the payments fail to materialize.
Is financing or direct credit worthwhile?
Whether financing or direct credit is the better choice depends entirely on personal circumstances. Anyone who buys all the furniture in a store can rely on financing. Here are usually very good interest rates, which may even tend to zero.
In addition, the application is very easy, because it only the personal information and those on the economic conditions have to be made. The creditworthiness check takes place directly on site or on the Internet, so that a commitment can be made on the spot. Already the purchase is completed and you can take the furniture home with you. The credit agreement will be sent by post and only the essential documents need to be sent in copy to the bank.
The direct credit is requested in a normal bank customary process. The only difference here is that an offer must be submitted on the purchase price. On the basis of this document and the information given in the economic circumstances, the institution decides whether the loan can be granted.
Here is a higher effort in the application, but there is also more freedom. Since the money is paid directly to the account of the borrower, the latter can decide freely what he buys where and where. Proof of use is not required, however, the loan amount is limited to the number specified in the offer. So who wants to have the free choice where he buys, who should bet on this variant.
Can a direct home loan be converted into a installment loan?
In general, a home loan can also be converted into a normal bank loan. However, only as long as this has not been paid. As there are different conditions for a bank loan than for a set-up loan, other conditions must also be applied here. If you would rather have the money at your leisure, you should opt for a regular loan when buying furniture.
Can set-up loans be rescheduled?
Home loans can also be rescheduled as a rule. However, this is easier with direct loans than with financing. For the latter, it depends on whether it is a partial or full financing. This is not a down payment – that meant the share of own money – it’s more about whether all furnishings have already been delivered or in this context special contracts exist.
If, for example, business facilities are purchased that involve maintenance by the dealer which causes recurring costs, such a contract can not usually be rescheduled.
This is the case, for example, when a cash counter is ordered, which is then serviced by a supplier technician at regular intervals. Here, the rescheduling – similar to a lease – would mean a new contract with a new bank for the supplier. This is basically not possible, so either the maintenance contract must be terminated or a rescheduling is not granted.
What happens in the event of a delay?
A delay of the payment can have different consequences. What only a few know: These depend on how long the acquired pieces of furniture are already in their own possession. Within a period of six months, all banks reserve the right to return them to pledges and to the merchant. Thereafter, however, must be expected with a significant loss of value.
Nevertheless, the furniture can be picked up and seized from this point on. These are then sold at the maximum residual value in order to repay as much as possible of the loan amount. Protection against a garnishment exists only if more than a year has passed or the furniture is demonstrably in a condition that no longer permits resale.