Monthly Installments for the Loan with Low Interest Rates
New car for € 30,000 and more? The necessary renovation of the apartment and / or the house cost more than 20.000 €? Or simply a new, high-quality kitchen for 10,000 €, which simply last longer than just 4 years? Admittedly – the enumeration may disturb most people somewhat, and yet such sums are not taken from the realm of fantasy for just mentioned uses, but are actually existing.
Because these are the orders of magnitude in which credit inquiries for the stated uses are made. Loan sums that are too glad to be accepted for longer periods, ie more than 48 months. The goal behind it? The longer the term, the lower the monthly installments for the loan.
Which in turn means that the available monthly household budget will be more than bearable. Supposedly so barely noticeable. But the supposedly helpful repayment term over several years can, under certain circumstances, become a real stumbling block and that means a debt trap.
Every 10th household is over-indebted – especially older people are affected
Numerous evaluations show that in 2017 alone, almost one in ten German households was over-indebted. What is particularly striking here is that the target group of 65- to 70-year-olds is more often than not sitting on unpaid installment loans.
Every second household in this age group is struggling with the problem of punctual repayments or is already sitting in front of a debt mountain that can no longer be controlled. In all other age groups, this situation can only be found in every third household. Why is it that obviously just the older generations are sitting on unpaid debt and are actually close to private bankruptcy?
The answer is quite simple: Older people in particular are too hasty and seemingly ill-considered to make long-term payment obligations, which inevitably result from a long-term loan, without directly thinking that when they retire, so too does the financial benefits can change.
For example, an initial monthly installment charge of € 150, which is easily determinable, can quickly lead to a burden if, within the framework of the pension, there is perhaps € 300- € 400 less in household allowance available each month.
Predictive and realistic planning is essential for loans
Anyone who decides to take out a loan or borrow money at an older age, for whatever reason, should be very realistic about the topic of time. Only those who consider foreseeable changes, such as the entry into the pension, recognize that a supposedly favorable credit rate does not have to remain favorable in the long run.
In this respect, it is true that here the beginning of the pensioner’s existence represents a kind of limit of the maximum financial performance and the period beyond should not be included in the credit planning. If, however, one travels close to or is within retirement, special loan offers for retirees should be considered.
These are characterized by special credit features, which take into account the particular circumstances and individual financial capacity of an applicant.