New customer credit – bargain hunters are welcome
Campaign weeks, anniversary discount and summer campaign: Banks often advertise their loans with special conditions. Real bargains are mainly available for new customers who don’t need more than a few thousand dollars.
In spring 2012, Cream Bank applied for a special new customer loan with special conditions. With a net loan amount of $ 2500 and a term of 24 months, the effective interest rate was 2.99%. The interest rate was independent of creditworthiness and was therefore available to all interested parties with sufficient creditworthiness. The financial service provider C&A Money also offered a promotional loan in spring 2012. 5,000 dollars of credit were available for 18 months with an effective interest rate of 4.3 percent. Just like at HVB, there were no cost traps in the small print. B. on a processing fee.
Loans are all about interest
At the same time, C&A Money also offered a credit line with special conditions: in the first three months after the credit line was set up, the effective interest rate was 0.0%. Since credit lines can be repaid free of charge at any time, the offer was like a three-month free loan.
Optimal for checking account balancing
The aforementioned offers are by no means exceptional, they are the rule. The intense competition in the consumer credit market is forcing banks with growth ambitions to take measures to promote sales. Consumers can benefit and eg B. cheap purchases or the settlement of an excessive current account.
Reductions in loan interest are comparable to special interest rates and other new customer bonuses for overnight accounts. Here, too, banks lure customers in the hope that they will be able to conclude further business later and amortize (at least) the initial investment. Just as with new customer offers in the deposit business, the willingness of banks to invest also has limits when it comes to loans. Special interest rates are typically limited to a certain period and / or a certain loan amount.
New customer bonus is not everything
But that doesn’t have to be a disadvantage. The monthly installment for Cream Bank’s new customer loan was $ 107.40. With 24 monthly installments, the loan service totaled $ 2577.60. Less the net loan amount, this resulted in financing costs of only $ 77.60, with which an overdrawn checking account could be conveniently offset.
A new customer bonus alone does not of course justify the unreflected conclusion of a loan contract. Some banks advertise their loans with fuel vouchers or even cash (the premiums are paid out after the withdrawal period has ended). Sometimes the gifts should hide unfavorable conditions.