Consumer loans – what has changed?

May 10, 2020 Loan

After the Second World War, credit in Germany was more of a negative term, because taking out a loan was considered untrustworthy and always had the smack of not being able to afford something on your own. At best, construction loans were the exception. In the meantime, however, the picture looks different, because financing has also become available in this country. In November 2017, for example, the Cream Bank specified the loan volume in Germany at around 8.216 billion dollars. But not only the willingness to borrow has changed in Germany, but also the type of borrowing. The most important innovations are briefly outlined below.

Consumer loans are increasingly being taken out online

A big change in borrowing is clearly attributable to the internet. More and more people prefer online loans to taking out loans in the bank branch. According to a GfK study commissioned by the banking association, behavior in this regard has changed continuously in recent years:

In the area of ​​online loans, it is currently instant loans that can be applied for quickly and easily. Credisure Finance’s instant loan, for example, can be paid out within 60 minutes and is also suitable for small amounts. Financing of this kind is very good for preferring consumer purchases and simply repaying the loan after 30-60 days with the next salary receipt.

Advantages of online loans over traditional loans

The reasons for the popularity of online loans are obvious, because there are some invaluable advantages that are popular today:

1. Better comparability

Online loans can now be easily compared in terms of their terms. Borrowers do not have to first visit several banks and inquire about the conditions, but can simply set their needs in comparison tools and carry out a comparison. On the basis of this information, better conditions can often be realized than without comparison.

2. Speed

The biggest advantage of loans on the internet, however, is the speed of processing. The instant commitment based on the information provided has already become a standard so that potential borrowers can plan straight away. In addition, however, consumer loans with fully digital degrees are increasingly being offered today, which means that there is no longer any need for mail and that disbursements can be made within 24-48 hours. In addition, there are the online loans described above, which sometimes pay out very small amounts in up to 60 minutes.

3. Time independence

Another advantage is that online loans can be applied for at any time of the day. Corresponding online forms are available 24 hours a day and can also be accessed on the go. This means that no borrower is dependent on the opening hours of his bank, which is usually within his own working hours anyway.

What else has changed with borrowing in Germany?

Another very significant change in borrowing in recent years has been revealed by credit report 2017 credit compass. Accordingly, the proportion of loans with a financing sum of over 10,000 dollars has increased from 25.4% to 36.6% of all loans since 2010. At the same time, very small amounts of financing up to USD 1,000 are gradually being requested less. One reason could be that part of the lending with the mini loan providers happens outside the banking sector and is therefore no longer included in the statistics. Overview of other trends:

  • More older borrowers: The proportion of borrowers over the age of 65 has increased steadily in recent years. Apparently, the willingness to take out loans also increases with this age group.
  • Longer terms: In recent years, the terms for loans have also increased on average. The average in 2011 was still 42.3 months, while the average term in 2016 was 48.6 months.

The conclusion

Potential borrowers use loan offers differently today than they did a few years ago. It can be observed that loan use via the Internet is becoming increasingly popular. Longer terms and larger amounts of credit are also among the consequences of this development. It remains to be seen what the credit market will look like in a few years and whether banks will still offer loans in the branch business.