The installment credit is a loan over a firm amount, which is paid back in rates.

Term

Installment credits are called also consumer loan. Installment credits are offered by banks under different who-bleached names such as autocredit or easy credit.

History

Installment credits are offered in Germany for the 50's. First the installment credit main business of the instalment credit institutions was, today it by business banks is generally offered. In particular for the autobanks the installment credit represents the most important product.

To installment credits at private people in Germany up to into force steps the law of contract modernization law the consumer credit law applied.

Completion

Installment credits are mostly standardized bank products for private customers.

They are usually out-put as unsecured loans, i.e. without the position of collateral. Only a wage and a content transfer are typically agreed upon as security in the contract. If the soil quality of the applicant for the credit is not sufficient, an endorsement can be demanded additionally by the bank. With the financing of KFZ it is usual to make a transfer by way of security of the car.

The repayment effected usually in same monthly instalments. These monthly instalments contain the credit repayment, the interest and if necessary the fees of the credit institute. The interest of an installment credit lies more highly as with construction financings, often however lower than with arrangement credits. Typically unique handling charges up to 2% of the credit sum are demanded.

Often with the installment credit contract a Restschuldversicherung is locked, which causes further costs.

Many direct banks offer installment credits more favorably than branch banks. In the Kredivertrag the effective interest must be indicated, in order to guarantee an easier comparability of the credit costs of the different credit givers.

Installment credits are registered typically into the Schufa.

Many dealers, insurance agent as well as free mediators offer installment credits of banks as Kreditvermittlung.

Notice

Notice by the borrower

The borrower can quit the credit 6 months after disbursement with period of 3 months. A does not result. However the bank is not obligated to pay the handling charge back and may an appropriate fee for the treatment of the notice compute.

Notice by the bank

The bank may only quit if all following conditions is fulfilled:

• the borrower must be with at least two sequential rates totally or partly in delay and
• rate arrears of at least 10 per cent (running time of the installment credit > three years) and/or 5 per cent (shorter running time) of the nominal amount of the loan must exist and
• the bank must have reminded 2 times and the credit notice have threatened.

Legal

Installment credits are regulated in Germany in "§"§ $88 BGB. Installment credits at private people apply in Germany as consumer loans. The customer has thereby among other things a right of revocation. Within 14 days it can contradict the credit agreement (must pay then however the amount of credit back immediately). Further formal requirements (writing, indication of the effective interest among other things) are prescribed. Detailierte regulations for the notice of installment credits are regulated in "§ 489 BGB.

See also

• Insolvency
• Debtor consultation
• Policy loan

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We found here 3 articles.

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