The banking and credit market in the Federal Republic of Germany is comparatively well structured due to the outstanding importance of a functioning monetary system and is also monitored by licensing authorities. Therefore, all borrowers should be careful about unofficial offers on the gray capital market, especially if fees and flat rates are requested without a binding consideration being provided. The most important thing about a loan without fees can be found here:
The legal regulations force a price indication of the final price
In the end, it is normally irrelevant for the borrower whether the loan is granted without fees or with a processing fee of 1 or 2%. Ultimately, the customer is interested in the total price – similar to the case with flight reservations. And this is given as an effective annual interest rate or a fixed borrowing rate and ensures that the offers are directly comparable. This means there are no more tricks and bogus offers that look very good in the advertised interest rate and are then made more expensive by exorbitant additional fees. The practice of a private credit bank from North Rhine-Westphalia was also declared invalid to grant each loan only as a package with insurance packages. If this practice were to be continued, the insurance premiums would have to be shown in the total price or the total interest on the loan. Ultimately, the loan without fees and only with interest is rare, but you can still get it.
The processing fee is often waived for promotions or existing customers
Nevertheless, there is the no-fee loan, in which the bank makes money using the pure interest margin. For existing customers, goodwill is sometimes dispensed with if the customer is a good customer and the bank’s normal interest rate is not necessarily competitive. In addition, there are always special promotions in the event that the bank has too many customer deposits and at the same time has granted too little credit. In all of these cases, no processing fees are charged to boost lending.
Promotional loans without fees: Beware of the interest rates
Some banks are not only looking for new current account customers by offering free current accounts! The offer of a free current account is then linked to a disposition loan at an unbeatably low interest rate. Customers are accustomed to the fast and unbureaucratic lending: no application is required, the loan without fees is a reality and the customer can take all the time for repayment. Here, however, be warned of interest stairs that are placed almost invisible. There is something in the small print of a favorable interest rate for the “first 500 USD” or “the first 6 months”. If the requirements are no longer met, the disposition loan is unexpectedly billed at full interest for some.
It is therefore irrelevant for you and every credit customer whether the loan is granted without fees. The total price, which is the sum of all fees and interest, is much more important. Since this must be stated openly, nothing stands in the way of an objective and quick comparison by the customer!