Under the classification “special loans”, you will find loans that stand out and differ from other loans as a result of the isolated loan nature. Special loans are characterized by special conditions or a special purpose.
Civil servant loans are granted exclusively to civil servants and public employees. The health loan is specifically used to finance medical and cosmetic surgery, which is not covered by health insurance.
Special loans are just special! Find the right loan for the right occasion. We will continue to build and expand this section in the future. It is always worthwhile to stop by.
Which loan for which purpose?
Every consumer knows that there are loans and how a loan works. An actor in business lends money from another actor. The borrowed money he pays then with or without interest in installments or in a sum back. So far so good. But when is actually which loan is recommended or necessary?
In the following overview we show the most important loan types, and which loans can be used when. The question is, of course, who can borrow. The requirements are the same for all institutes:
- The borrower must be of legal age.
- The borrower must prove his residence in Germany.
- An account with a German bank is also necessary.
The disposition credit
The most common is the disposition credit, Dispo for short. The bank will grant the account holder an overdraft line. He can also withdraw money or make transfers without having a credit balance. Usually, the Dispo is up to three net monthly salaries. It is up to the bank to decide whether to overdraw the account. For private individuals, there is neither a loan agreement nor collateral provided. Here the Dispo differs from the overdraft, the disposition credit on a business account.
If the financial position of the Account Holder deteriorates, the Bank may, in whole or in part, cancel the Dispo, subject to a reasonable time limit. If bank customers still have dispositions beyond the granted credit line, this is called an overdraft. The bank can tolerate this, but does not have to.
Disbursement loans are suitable for bridging very short-term financial bottlenecks. But because of the oversized variable interest rates, they are not a long-term solution. Add to this the risk of the credit spiral. The system does not have to be returned, the account holder is in danger of losing more and more every month.
The personal loan
Personal credit is primarily used for consumer finance and is not earmarked, with the exception of car loans. Depending on the bank, the loan amount is between 2,000 and up to 100,000. At maturity, the borrower has the choice between twelve months and up to 120 months. The interest rate is fixed for the entire term. The amount is usually based on the creditworthiness of the borrower and the repayment term. However, some institutions also calculate interest-free and maturity-independent interest rates.
The legal basis for the personal loan is a written credit agreement. The salary assignment serves primarily as security. The repayment of the loan is made in equal monthly installments.
The car loan
For the car loan is that it is earmarked for the purchase of a car, motorcycle or motorhome issued. In terms of interest rates, it is slightly below that of an installment loan for free use. The background is that the car serves as security. If the borrower can not repatriate his loan, the bank sells the car. This would not be possible when financing a holiday trip.
The balloon credit
The balloon loan describes a special variant of the car loan and takes its name from the last installment, the so-called balloon rate. This is inflated compared to the rates during the term.
With a balloon loan, car buyers and dealers determine what the residual value of the vehicle will be at a certain point in time. Although the loan is closed over the entire purchase price, the installments are only calculated on the difference between the purchase price and the residual value. This makes them much lower. At the end of the agreed loan term, the buyer now has three options:
- He returns the vehicle with its residual value to the dealer. So the balloon loan is a bit like leasing.
- He pays off the last installment, the balloon rate, in one sum, the vehicle finally becomes his property.
- He completes a follow-up financing for the last installment.
The official loan
Many banks advertise with special civil servant loans. These are classic installment credits at your disposal with slightly lower interest rates. Civil servants are non-terminable under normal circumstances. This eliminates the risk for the bank that the borrower can not repay the loan due to unemployment. This credit advantage translates into lower interest rates.
The loan for self-employed
Many banks grant self-employed no installment loan. Self-employed persons can not submit a salary assignment unlike employees. This means testing other collateral, which in turn is time and labor intensive. On the other hand, a fluctuating order situation can make the repayment questionable. The additional expenses and the higher credit default risk can be paid by banks, which provide loans for self-employed, by a slightly higher interest rate.
The framework credit
With a framework credit it concerns a middle distance between Dispo and installment credit. On a sub-account, the bank grants the customer a credit line. As a rule, the salary assignment serves as security. If the customer now requires additional liquidity, he can use this up to the amount of the credit line. Interest accrues only on the loan actually used, not on the whole framework. The loan agreement also provides for a partial monthly repayment of the loan. Repayment is made as a percentage of the credit drawn, but is based on a minimum rate.
The interest rates are well below the interest on a credit line, but are also variable. As a result, and through the agreed repatriation, a framework loan may well be worthwhile for larger purchases.
The construction financing
Mortgage lending serves to acquire real estate or renovations. These are collateral secured loans, means that the lending bank is entered as a creditor in the land register in the context of a land charge order. The lion’s share of this product segment is covered by annuity loans. The borrower agrees with the bank a period for the fixed interest rate. This is usually shorter than the entire loan term. During fixed interest, the borrower pays a steady monthly installment. This consists of the interest rate and the initially agreed repayment. With each repayment settlement, the proportion of interest payable within the installment decreases as the loan decreases. The repayment share within the fixed rate therefore increases.
The modernization loan
Under this heading, banks offer real estate owners special loans for refurbishment and modernization. The loan amount depends on the bank and can be between 2,000 and 100,000 euros. The terms are between one year and 20 years.
The special feature of these loans is that they must be used on the one hand earmarked for the renovation. On the other hand, the bank waives the land charge order. Although the interest rates are slightly higher than a secured with a mortgage loans, the interest rate for an installment loan but still significantly.