by Sabine Hildebrandt-Woeckel, €uro on Sunday
First the corona pandemic, now the fear of rising inflation. So it’s hardly surprising that more and more people in the Federal Republic are looking to the future with fear. According to a recent survey by Schufa, within just a few months, from January to May 2022, the number of people who believe that it will be increasingly difficult for them to make a living has increased from 28 to 38 percent.
It is currently difficult to foresee exactly what impact this will have on future lending. Although the number of new contracts fell slightly in May, it was still above the value of the previous year’s index. And despite reluctance to buy and rising prices, consumers in Germany took out more installment loans in 2021 than in the previous year, albeit mostly at a low level.
Eight banks – four categories
But even if the current development can hardly be predicted at the moment, one thing is certain: the more difficult the situation becomes, the more important it is for potential borrowers to find the best offer for themselves. The tests of branch loans (this edition) and online loans (next edition), which the German Customer Institute (DKI) has now carried out for the twelfth time on behalf of €uro am Sonntag, provide detailed assistance here.
In the current comparison of branch loans – as in the previous year – eight providers are examined closely. Test categories are on the one hand the specific conditions and the offer, i.e. the scope of services and equipment features, on the other hand the quality of advice in the branches (referred to as “information” in the tables) and customer service are evaluated by so-called mystery shopping. The latter is done through inquiries via the hotline and e-mails as well as the evaluation of the website and social media appearances.
All categories are first evaluated individually (tables on page 38/39) and finally merge into one or, more precisely, two lists of the best (see right). Background: In order to protect non-culpable payment defaults that can occur as a result of unemployment, disability or death, most banks – and all those tested here – offer what is known as residual debt insurance (RSV). To reflect this, there are two rankings for the conditions this year for the first time: with and without RSV. This in turn has an impact on the result in terms of price-performance ratio (which is formed from conditions and offer) and the overall result.
Ten credit requests
But let’s stay with the conditions, which have the greatest influence on the overall result at 40 percent. In order to be able to compare them optimally, the DKI has constructed ten comparison cases, which differ in terms of loan amounts and terms as well as the respective customer profile. For two of them, the providers were also asked to state the conditions for residual debt insurance (100 percent protection against death, unemployment and incapacity to work).
Since freelancers and the self-employed traditionally find it more difficult to get loans, all test customers are employed on a permanent basis, have a monthly net income of between 1780 euros and 4450 euros and are free of liabilities.
Consumer desires vary according to income and range from 5,000 euros for a home sauna to 12,000 euros for a four-week trip to Asia and 16,000 euros for a wedding to buying a horse (35,000 euros). Maturities, marital status and type of residence vary, as does the possession of a car or financial investments, which is also a standard feature.
In addition to the specific conditions of the case studies, the two-thirds interest rate is also evaluated in this category, i.e. the interest rate that at least 66 out of 100 customers receive.
If you look at the conditions without residual debt insurance, the installment loan from the Santander Bank performs best, which has pushed it to the top of the overall ranking of this group. A real improvement on the last test, in which he had to make do with 3rd place in terms of conditions and 4th place overall.
Santander with top interest
Santander names the lowest interest rate (1.99 percent each) for each sample case and thus also offers the greatest potential for savings. With the largest assumed credit volume of 35,000 euros and a term of 84 months, this makes a whopping 7544 euros and a few crushed ones. At two-thirds interest, however, the test winner is only in the middle. Two-thirds of Santander customers receive an average interest rate of 5.57 percent for the terms and loan amounts queried.
BBBank is the winner when it comes to conditions with RSV. If you need 30,000 euros here, you save almost 8,855 euros compared to the worst provider. However, she still does not achieve the overall victory. At the top of the overall ranking with RSV is Hypovereinsbank, which also achieves a top position in terms of conditions, just behind BBBank and Targobank. With an interest rate of 2.99 percent, she can name the second lowest interest rate for all ten sample cases. And if you look at the total cost of the loans including RSV, it plays just as well as the two-thirds interest rate.
The HVB provides the best information
The Hypovereinsbank owes its top position in the offers with RSV above all to its above-average result in the information category. In the test talks, the personal data of the customers were requested and the exact capital requirements were determined. The cost structure of the loan was also explained in a comprehensible manner and special repayments or early repayments were actively addressed.
Whether it makes sense to take out residual debt insurance “is ultimately always an individual decision,” says Jörn Hüsgen, Managing Director of the DKI. The higher the amount and longer the term, the more sensible it can be. Especially when family members do not have separate protection from risk and accident insurance. However, consumer advocates recommend always checking possible alternatives before concluding the contract. All banks listed here also offer the RSV without linking it to an installment loan.
Targobank with a top offer
If you look at the categories of information, customer service and offers individually, it is noticeable that a different institute is at the top each time. As already mentioned, when it comes to information, it is the Hypovereinsbank. On the other hand, Deutsche Bank achieves the best placement in customer service, and when it comes to offerings, like last year, it is Targobank, which scores among other things with an extended right of withdrawal (28 days) and same-day processing of loan applications. By no means a matter of course: only half of the banks surveyed granted an extended right of withdrawal, and the processing time for loan applications ranged from half a day (BBBank) to two days.
In general, the offer of the tested branch banks differs significantly: For example, all banks require proof of salary between one and three months for approval. Deutsche Bank for new customers and Hypovereinsbank always want to see account statements for the last 30 days, Commerzbank for the last 90 days, and at Creditplus Bank this depends on the amount of the loan. And only two institutes do without a silent assignment of wages and salaries.
The range in the design of the loan is just as large. The minimum loan amount is between 1000 euros (Creditplus Bank, Deutsche Bank and Santander) and 5000 euros (BBBank). The maximum amount ranges from 50,000 euros (Postbank) to 100,000 euros (Creditplus Bank). And as far as flexibility is concerned, the banks tested also act differently: In addition to category winner Targobank, only customers of Creditplus Bank, Deutsche Bank and Postbank can increase, reduce or defer rates during the term, change the time of payment, make special repayments, that Pay off the loan early or increase it. For all others, at least not all possibilities are granted.
Service king Deutsche Bank
Customer service is also interesting to look at. The overall winners, Santander and HVB, both achieved a “good” here, but found themselves in the lower places. Santander employees left most emails unanswered compared to the rest. At HVB, callers spent most of their time on hold, more than five minutes on average; HVB was the quickest to respond to e-mails.
Anyone who places particular value on customer friendliness sees themselves in the best of hands with Deutsche Bank and Targobank. They answered all telephone inquiries completely satisfactorily.
The banks tested received mixed marks for their websites. All are self-explanatory, offer a branch or consultant search and FAQs on the subject of credit in general. However, the testers consider the scope of information to be expandable. Sufficient information on the conditions, for example, can only be found at Postbank.
This is how it was scored
The German Customer Institute (DKI) works with a test design that was developed in cooperation with the economics faculty of the Heinrich Heine University in Düsseldorf. Between February and June 2022, it tested the quality of branch banks that offer creditworthiness-based installment loans for private individuals for €uro am Sonntag. The data was collected by surveying the providers, mystery shopping in the branches, covert calls and emails and by analyzing the websites and social media presence. A total of 232 customer contacts took place.
285 individual criteria from four categories were evaluated, for which a total of 100 points could be achieved. The “Conditions” category deals with interest rates, borrowing costs and fees. “Offer” means the scope of the loan, i.e. possible terms and loan amounts, the scope of the credit check or the required loan collateral. Under the generic term “information”, among other things, the level of explanations on the costs, the equipment, the mandatory Schufa inquiry and a possible conclusion of a residual debt insurance (RSV) are examined. It is also about the scope of the analysis of the customer situation. “Customer service” includes, among other things, response times of the providers as well as friendliness and competence. The additional evaluation “Price/Performance” summarizes the conditions and the offer and is not included in the overall evaluation.
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Image Sources: IM Photo / Shutterstock.com
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