There are several reasons in life to take out a loan. If the money for a spontaneous or important occasion or an acquisition is missing, you have to borrow this money and then pay it back to the lender in mostly monthly installments.
The comparison portal Best Bank has now published an evaluation of the top 10 credit reasons with the average loan amount. In the following we also present this list.
Top 10 credit reasons
10: Dentist treatments
We’ll let our little bit cost us something. Anyone who doesn’t have such healthy teeth anymore wants to have a film star smile. For this, a loan is gladly taken out, which is now even brokered by some dentists. Since the health insurance companies are far from paying for all services, the total costs for veneers, inlays, implants, crowns, bridges or generally for third teeth tend to rise to five-digit levels.
Average: 5,767 USD
The most beautiful day in life! And you don’t want to embarrass yourself with an average wedding in front of your relatives and friends. To do this, you dig deep into your pocket – or just take out a loan and then quietly and secretly repay it – possibly also with the income from monetary gifts. The interest rate on wedding loans is usually also higher, since it cannot be attached
Average: 10,328 USD
8: Travel and vacation
Traveling is the pleasure of the German. Whether cruise, beach vacation or winter vacation – if the travel budget is tight, a loan is taken out. How else do you stand in front of your colleagues and friends when you have nothing to report from your vacation. You can find more information on the holiday loan on our topic page.
Average: 5,382 USD
Freedom on two wheels. The adventure of motorcycling makes men’s and women’s hearts beat faster. A loan is often applied for. But you should also consider that motorcycles cause consequential costs due to higher safety requirements – e.g. inspections, more frequent tire changes and possibly also a garage.
6: New cars
New cars are coveted status symbols in Autoland Germany. Due to the rather high acquisition costs, 70 percent of all new vehicles are leased or financed. Auto loans are usually brokered by car dealerships – an interesting additional business. You should therefore look for other cheaper loan offers for your new car in terms of loan costs. Since the car is an attachable asset, interest can sometimes be lower.
Whether beautification or legally required modernization – if the necessary financial means are not available, a lender must advance it. Since it is a long-term investment in your own property, the interest rates are usually lower. Such loans are also supported by development banks or some credit institutions. The new roof, the heat-insulated windows – if the measures also improve the energy balance, you will save money in the long term and thus protect your wallet and the environment.
Average: 10,641 USD
Germans like to dig deep into their pockets for the interior and the furniture. If there is not enough money there, only the credit remains. Since the goods are durable, a lower interest rate can be expected for the loan.
Average: 7,916 USD
3: Overdraft facility compensation
You quickly slip into the overdraft facility. And if you end up there regularly month after month or if you don’t come out at all, that’s a worthwhile source of income for the bank due to the exorbitant, mostly double-digit interest rates. In order to recover the current account again, taking out a consumer loan can be worthwhile. At least eleven percent of the loans examined are used for debt rescheduling. It should be noted, however, that your own discipline should ensure that upholstery is adhered to in the future, so as not to slip back into the overdraft facility and at the same time pay off the other loan.
2: debt restructuring
In addition to the rescheduling of a overdraft facility, the second most common reason for a loan, at 22 percent, is the rescheduling of other loans. In times of low interest rates, this can be worthwhile, especially with large loan amounts such as real estate loans – but one should take into account the compensation costs for the previous loan provider and compare the savings.
Average: 19,673 USD
1: Used car
The Germans most often take out a loan to finance used vehicles. This affects around 27 percent of the loans. Used cars are also an attachable good – so interest rates are usually below the 5 percent mark.