The FEG’s interest rate hike barely fails to meet the terms of installment loans.
While many banks have more expensive discretionary and credit lines in recent weeks, installment loans with fixed interest rates are still favorable. Many banks are also expanding their product range.
The Credit Bankive has increased the maximum loan amount of its consumer loan from 50,000 to 70,000 dollars. Such a move clearly shows that banks are facing intense competition. Fighting is for customers with small and large credit needs.
This is also proven by HGS Bank: The subsidiary of Deutsche Loanie bank has reduced the minimum loan amount of its loan from 3,000 to 2,500 dollars. The bank’s profit margin also drops with the approved loan amount. However, customer acquisition is becoming increasingly important for banks, with the result that the ranges are adapted to a broad target group.
The independent MFG financial advisory protects the average interest rate on installment loans with 36 months to 7.15 percent. For 48 months, the MFG index has an interest rate of 7.19 and for 60 months 7.53 percent. As a result, the yield curve is also very flat for installment loans.
The interest rate trend on the capital market
In addition to competitive pressure, the interest rate trend on the capital market is another important reason why the conditions for installment loans are favorable. While interest rates on the money market have risen noticeably, not least because of the rise in interest rates, there is pressure on longer-term interest rates.
Safe bond prices are picking up as market participants behave risk-averse and shift their money into low-risk bonds. This benefits z. Federal securities and bank loans from institutions with top credit ratings. This, in turn, makes refinancing cheaper.
The future interest rate trend is currently very difficult to estimate. On the one hand, a relaxation of the dollar debt crisis could lead to sharply lower prices for safe bonds, which would be accompanied by rising interest rates. On the other hand, it is also conceivable that the foreseeable slowdown in the recovery in many parts of the world will develop into a (moderate) recession. In this case, experience shows that falling interest rates can be expected.