Savings and mortgage rates are historically low, but why don’t you notice this when you have a loan? Credit interest rates have fallen in recent years, but much less rapidly than the rates for savings and mortgages. How come you still paid so much for your loan? And will it be less in the coming years?
Development of credit interest since 2008
People still choose a too expensive loan!
You probably too. By first comparing well, you can easily find the cheapest lender. Borrow cheap money.
The 2008-2009 period was mainly dominated by the financial crisis. Many people lost their jobs or were unable to pay their loans for other reasons. When providing new loans, the banks were therefore exposed to considerable risk. That’s why they asked high interest rates. For a personal loan or revolving credit of 10,000 euros you quickly paid 9 to 11 percent loan interest.
Lending rates remained high until 2013
Credit rates fell in the years up to 2013. The banks themselves had to pay less and less to borrow money from investors and central banks. This advantage was also reflected in the interest that you paid for a loan. But again not completely … Banks were not waiting for loans. After the crisis, the people were faced with stricter rules. For example, the banks had to keep more and more money in cash compared to the loans they provided. That is why they kept the interest rates relatively high.
Credit interest rates are also finally falling
In the years 2013/2014, borrowing finally became cheaper. The new capital requirements had been fully processed by the banks and the economy was slowly recovering. As a result, the banks dared to considerably lower the interest rates for personal loans and revolving loans.
In addition, new online lenders came on the market asking for lower interest rates for personal loans and revolving loans. This forced the other banks and lenders to lower their interest rates.
Development of credit interest rates stable since 2016
From mid-2016 it seems quiet. The loan rates will remain at the same level from then on. You pay around 6 to 6.5 percent interest for a personal loan or revolving credit.
Expectation of credit interest rates 2018
We expect you to continue paying approximately the same interest rates in 2018 for a personal loan or revolving credit. The rates at which banks and lenders themselves borrow from investors and central banks remain at the same low level. There is no reason for banks to raise lending rates.
Perhaps the borrowing rates are going down even a little bit. The economy is growing, unemployment is falling and the outlook is positive. As a result, lending money is less risky for banks and the risk premiums that loan providers include in their interest rates can be reduced.