Everyone who wants to apply for a loan would probably want a loan with low interest rates. As legitimate as the wish is, in some cases it can be fulfilled, in others it is rather difficult to get a loan with low interest rates. In principle, the interest depends on the key interest rate and the valuation of the borrower by the lender. Both factors together and the interest rate policy of the lender result in the offered interest rate.
Effects of the key interest rate on the loan with low interest rates.
The financial institutions that serve as lenders to customers only lend their own money to a small extent. They refinance the loans granted on the financial market. The key interest rate specifies the current interest rate at which the bank can borrow the money. If key interest rates are low, loans for private customers will also be cheaper. Since the banks always have to count on the risk of default, there is also a risk premium on the bank’s key interest rate and profit.
In addition to the processing fees, it is precisely the risk premium that can make a loan expensive. With high risk premiums, the loan with low interest rates is therefore rather unlikely. The banks themselves determine the criteria by which the surcharge is measured. Factors from our own experience, negative Credit Bureau entries and the score ensure the risk assessment.
The influence of the personal score on the loan with low interest
For the loan with low interest rates, the score that results for the individual is a decisive influencing factor. It is not a matter to be influenced individually. In addition to the determined consumer behavior, age, place of residence, marital status and many other factors are included in the score. The procedure is somewhat reminiscent of “clan liability”. While this is not legal under the law, the score is. The procedure is simple. All data of an applicant, gender, age, place of residence and other are entered. The system compares the data with the behavior of those who show a data match. If the applicant now happens to live in an area that is amassed with delinquent payers of his gender and age, he is automatically assessed as a risk. Your own behavior in the past quickly takes a back seat. The score thus makes a significant contribution to whether or not the loan with low interest rates becomes a reality.