find installment credit: Loan comparison, providers and banks

The most important thing: Don’t be rushed! You pay off a loan for a long time, so you should prepare yourself well to avoid paying hundreds or thousands of Euros too much later.

How important is a credit comparison before the conclusion of a contract?

The most important tip: Don’t just go to your house bank. Of course you would expect to get the supposedly local, best financial product here. According to a current calculation by the portal Smava, we spend over 3 billion euros too much on interest in Germany every year! To be even more precise, it is even 3.5 billion that are paid too much each year by instalment loans. Mostly because you go directly to your house bank and believe that my advisor will already recommend the “best” products to me.

The best alternative to the house bank are:

• comparison portals > direct banks

3.5 billion euros every year! The comparison is worthwhile. Direct banks in particular often offer lower interest rates. For example, because they do not maintain a costly network of branches like the typical banks you know from the city centre.

In the end, it’s like buying a car, nobody would buy the first best model. Of course you drive to different dealers, look online and compare. You do the same on holiday. Countries and regions are compared, flights, hotels and much more.

But where can you find serious installment loans online?

Online you will find a large selection of comparison portals. We have selected top 4 for your installment credit.

Installment credit online: comparison portals

Our recommendation for your research:

Top 4 comparison portals for installment credits (Germany):

1. Smava
2. Verifox
3. Check24
4. Finanzcheck

On the portals you have to enter your desired conditions. It is important that you provide honest information so that the portal can give you a realistic assessment. In general, you should never let yourself be rushed when signing a contract, think, reflect and take your time. After all, you will be paying the installments over a long period of time.

We also have a great tip for your creditworthiness (keyword Schufa): If you apply for the instalment credit with a second borrower, your creditworthiness will improve and you will get lower interest rates! It is also important to always place your Schufa inquiry on the comparison portals as a “condition inquiry”. Because if you send too many inquiries, your creditworthiness will also suffer here due to frequent requests.

Here once again the most important tips summarized:

1. Request as “condition query”, otherwise creditworthiness will be worse

Are banks in portals reputable?

Many of the banks on portals such as Smava, Verifox, Check24 and Co. are unknown! This makes many people sceptical and quickly raises the question: Are the unknown banks on the portals even reputable? The simple answer is: Yes. On all 4 portals you will find serious partners. Many of the banks are so-called direct banks, without branches. They mainly work online and via app on their mobile phones. Therefore these providers are less known. But they are subject to the same rules and laws and are serious providers.

Tip! First places are often advertising

It is important for you, the first places are usually awarded as advertising places. Just like in search engines, the first places are of course coveted, everyone reads them. Accordingly, an advertising partner is often in 1st or 2nd place, not the most favourable conditions for your instalment credit.

Savings Tip: Personalized price

If you need an installment credit quickly, online, you want to treat yourself and afford something! Here we are quickly back to the new smartphone, the chic designer dress or the annual holiday. But, did you know? Prices vary according to the user and the device you are online with!

price difference by device, location & Co

Suppliers have an extremely large amount of information from us. Depending on the device you use to order a product (technology, fashion, flights), sometimes the prices differ. Our data is stored by so-called “cookies”. They tell the provider where we come from, whether we are on the road with the smartphone, tablet or notebook. They also know which operating system is used.

Comparison: Airfare and technology

If you have a new iPhone now, it’s safe to assume that you’re going to enjoy it. Accordingly, the flight will quickly increase by 5 euros.

An example, you see a flight to Palma, Mallorca.

If you take 10 or 15 minutes and actively watch the prices, you will notice that they sometimes differ.

On your mobile phone the flight costs 152.60 and on your notebook at the same time, same destination, airport and co. for only 147.60 – a whopping 5 Euros saved, or 5 Euros spent too much.

+ 4 % more expensive

For technology, the difference is even greater. Here you sometimes find products for 23 Euros and the next device for 37 Euros.
+ 60% more expensive</block quota>
But how does it work? Everything is saved, from where you surf, what you put in the shopping cart, which device you use. Of course we have a few tips on how you can protect yourself a little better.

What can I do against price personalization?

Companies would actually have to inform about the fact that they can set their prices on the basis of price personalization. But the information is then in the small print. Your data will be stored by “cookies”, as mentioned above. So you have to disable them specifically, for example in the “security settings” of your browser. Here you can delete your “browser history”, for example. This makes it more difficult to create profiles. The same also works for research. Don’t use your normal browser window but simply an “incognito” window. Already you surf more anonymously and the tracking of your data is not so easy for companies anymore.  Google also stores a lot of data, because over 90% use the search engine for information. There are many good alternatives to Google that do not store your data, like DuckDuckGoGo.

Tips:

1. Delete browser history regularly in the “Security Settings”
2. You should do research anonymously, for example in the “Incognito window” (always in the upper right corner of the settings, no matter if app, tablet or notebook)
3. Switch search engine! DuckDuckGogo for example, instead of just using Google.

Conclusion: Compare instead of committing immediately

You pay off loans over a long period of time. “Dispo” sounds nice, but it means constant liabilities. This restricts your freedom in the future. So make sure you check whether you absolutely need the installment credit or not. If you need an extra 3.000 Euro to surprise your treasure with a trip to the Maldives, how about La Palmas on Gran Canaria? Beautiful, 30°C all year round, sun and only 3 hours by plane. Saved!

If you do want to take out an installment loan, compare providers and banks. Do not fall back directly to place 1, 2, here, there is often advertising in comparison portals.

Consideration, selection, comparisons – only at the end you should decide on a provider!

Back to the Capital Investment editorial.

Share risk assessment: advantages and disadvantages

Access to shares is easy for everyone, online or in the bank branch. Every bank offers such securities accounts, some also charge securities account management fees.

For laymen, there is always a risk, because trading is confusing. Stock tickers, news, tweets, many things have an influence on prices and developments. The (daily) trading with shares requires competence and experience. When speculating, high losses are immediately possible. Thus, the risk but also the loss in case of doubt is medium to high. Who wants to start safer in the trade, which should fall back to ETFs. Where there is shadow, there is also sun. Thus, the returns of shares are just as medium to high compared to traditional investments such as savings account, time deposit or overnight money. You can read more about this in our article on index funds (ETF).

Facts about shares as an investment

The most important 3 facts about shares as an investment:

• Know how required
• High risk (complete failure also possible)
• Purchase fees must be taken into account in the volume

Stocks offers great returns, as we also show in the dividend payout example on our article. It is only important that you study the subject of shares in detail before you make your first purchase. We tell you what you need to consider in the first steps.

Advantages

• Easy access via banks or direct banks (online)
• High yields are possible
• Tax advantages

Disadvantages

• Many banks charge custodian fees (tip: direct banks, you often save a lot of money here, even when buying. Read more: Buy shares direct bank)
• Unclear trade, especially for laymen
• Price fluctuations in real time

Buying shares? Definitions and tips

Before buying your first securities, you should check which type of investment you are. Basically, you have two options.

1. Passive investor (ETF, index fund)
2. Active investor (share)

Passive (ETF) or active investor (stock)?

Both forms offer advantages. Trading individual stocks provides for higher price breakouts, thus potentially more profit (and loss). The risk increases. If you want to trade more cautiously, you can buy index funds (ETFs).

Passive investor

The word ETF portfolio stands for “Exchange Traded Fund” and is an exchange-traded index fund. This index fund tracks the performance of an index, such as the DAX in Germany or the NASDAQ in the USA. But these are only the best known representatives. As you will see in the list of the best, biggest and cheapest funds.

New York Stock Exchange

At their core, ETFs combine the advantages of stocks and funds into one product, so you can invest money directly in entire markets through ETFs. A real advantage.

Active investor

In contrast to funds with manageable risk, you can also act as an active investor in trading. As an active investor, you invest in individual stocks. This costs time, because it is about analyzing individual companies to determine which paper you want to buy.

As an active investor, you will be affected more quickly by price fluctuations. Even one piece of bad news in the morning about a single company can greatly minimize your capital if you don’t diversify.

Source: IhrHausverkauf.de(Buy Stock)

Difference between house bank and direct bank

With the bank you have two options, either you go through the classic house bank, such as Volksbank and Sparkasse. Here you can make the purchase directly through the banker or your second option, the buy your shares or funds online, at a direct bank. Direct banks are better known providers such as comdirekt or degiro but also others.

What is the advantage of a direct bank? As a rule, they are significantly cheaper than in a traditional branch bank. Direct banks save on the branch network and employees. The difference between a traditional branch bank and a direct bank is clear: In the branch bank you have a direct contact person and you get advice if you want. You don’t have this direct contact person at a direct bank.

If you prefer to go to a local bank, then you should make sure that it has a well-developed network. Especially if you sometimes travel or have business appointments in other cities. Which banks have the most branches?

1. Deutsche Bank AG (2,984 branches)
2. Commerzbank AG (1,530 branches)
3. Postbank AG (1,092 branches)
4. Unicredit Bank AG (933 branches)
5. Wüstenrot Bausparkasse AG (500 branches)
6. Targobank AG (351 branches)
7. Santander Consumer Bank AG (324 branches)

Source: IhrHausverkauf.de(buy stock, as of Jun 30, 2019)

Shareholders in Germany

How many shareholders are there in Germany? In 2018, Germany recorded an average of around 4.55 million direct shareholders. The current figures for direct shareholders in Germany from 1996 to 2018 (in millions):

Source: Statista

Most expensive shares in the world

1. Berkshire Hathaway
   US Holding with €242,784.90 and a market capitalization of €399.02 billion.
2. Lindt & Sprüngli AG
   Swiss Chocolate with €58,375.96 and a market capitalization of €12.9 billion.
3. Sika AG
   Swiss specialty chemicals with €6,363.68 and a market capitalization of €6 billion.
4. Zoological Garden Berlin
   Zoo with 5,703.01 and a market capitalization of €62.73 million.
5. Saxon Milk Inc.
   belongs to the Theo Müller Group with € 5,025.01 and a market capitalization of € 50.25 million.
6. Cantonal Bank of Zug
   Swiss bank with €4,592.51 and a market capitalization of €62.73 million.
7. Mortgage Bank Lenzburg
   Swiss bank with €3,852.89 and a market capitalization of €277.3m.
8. Metal Zug AG
   Swiss Household Appliances, Infection Control, Wire Processing and Real Estate with €3,171.31 and a market capitalization of €1.1 billion.
9. SGS SA
   Swiss testing, inspection, certification and verification company with €2,121.68 and a market capitalization of €16.2 billion.
10. A.P. Moeller Maersk B
    Danish shipping company, gas & oil production with €1,633. Market capitalization33 billion €.

Source: Finanzen.net

Is it worth buying shares?

If you hold shares for a long time, you will receive dividends at the end of the financial year if you are successful.

271.1 % Increase in dividends in 15 years

In this chart you can see very impressively how dividends increase year after year, billion after billion. This is the development of the dividend payments of the DAX companies in the years from 2003 to 2019 (in billions of euros). Just the jump from 2004 to 2019, which is 15 years, added 27.8 billion euros in annual payouts. An increase of 271.15 % compared to the same year.

• 2003: 10.3 billion
• 2005: 15.2 billion
• 2007: 23.5 billion
• 2009: 22.1 billion
• 2011: 26.0 billion
• 2013: 28.0 billion
• 2015: 30.1 billion
• 2017: 32.1 billion
• 2019: 38.6 billion

Source: Statista

How much does it cost to buy shares?

If you are interested in buying shares, you will find many different pricing models online, each broker has its own. Here, the individual prices per package purchase depend on your online broker.

The standard fees for the purchase of shares are usually five to eight, maximum ten euros. In addition, there is a fee of 0.25% depending on the trading amount. The fee per purchase is usually limited to an upper maximum amount.

If you are online a lot, you will quickly find alternatives via search engines and comparison portals. Flat-fee offers from various established discount brokers such as onvista are attractive, for example.

Equally interesting are promotional offers, where at certain times the volume-dependent fee or the entire fee is waived completely.

Fees and costs for the purchase of shares summarized:

• Purchase fee of 5 – 8 Euro, maximum 10 Euro
• Trading amount mostly 0.25 % of purchase
• Tip. Flat-free offer like at onvista

First stock purchase? Should you invest a lot or a little? Read more on the topic here with a stock purchase example calculation.