The truth about mini-rates in credit advertising

Credit comparison portals put millions in advertising to attract new customers. They promise attractive loans at mini interest rates. Less than one percent should pay for his loan, according to advertisements and television commercials.

But many consumers who want to have such a cheap credit, are bitterly disappointed: Either they find in their loan offer significantly higher interest rates – or they immediately receive a rejection.

How does this difference between advertising and reality come about?


The riddle’s solution is partly in a very simple little word: “off”. If, for example, a cheap loan is offered “from 0.9%” in advertising, then there is certainly someone who actually receives this loan. He should, however, best be a lifetime civil servant. Or a well-paid employee with paid-off home ownership and a Financial standing score near 100.

The problem: Most loan seekers are in a very different financial situation. And that’s why they end up with very different loan offers. And “different” in this case means “more expensive”.

Credit calculators promise the blue from the sky


Loan calculators, as they can be found on the Internet in many places, work just like the colorful commercials. They too merely indicate how favorable a loan could be – if the conditions were almost perfect. However, if the income is a little lower or maybe even a negative Financial standing entry is present, then the cheap credit moves into the distance. Again, the loan offer at the end hardly has anything to do with the “result” of the loan calculator. And in many cases, the prospect immediately gets a rejection.

Loan calculator and many advertising messages arouse false expectations among the loan seekers. They stir up hopes that will later be disappointed.

This has nothing to do with honesty and transparency, says Good Credit. That’s why there is no credit calculator on our site that will show you “your” credit in seconds. That simply does not work – because the loan is always calculated individually by the bank. And that is only possible after the bank knows some key data such as your income, existing obligations and so on. The “credit calculator” do not ask for this data at all. And that’s why they can never deliver a reasonable result.

Pay attention to the representative borrowing rate

Pay attention to the representative borrowing rate

The best protection against disappointment in lending rates is provided by a look at the “representative borrowing rate”. Sounds complicated, but it’s quite simple: Here, credit intermediaries and banks can not specify mini-interest rates that only a small proportion of borrowers can enjoy.

Instead, they must name the terms that apply to at least two-thirds of the borrowers. Logically, there is no zero before the comma – but the information is realistic.

Conclusion: Mini interest rates sound good in advertising, but often have little to do with reality. Borrowers should know that and have no exaggerated expectations. Then they will not be disappointed in the end either.

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