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Up to 15.31 percent interest – be careful with installment loans from online retailers

Up to 15.31 percent interest
Be careful with installment loans from online retailers

If you don’t have enough change in your pocket, but still want to satisfy an urgent desire to consume, you often use an installment loan. But if you use the retailer’s installment purchase option when you shop online, you sometimes pay a lot more.

In essence, the idea of ​​financing a purchase with an installment loan is sometimes not a bad idea. At least if the purchase itself cannot be deferred to financially better times and is otherwise made through an overdraft.

But even such an installment purchase has its pitfalls, at least if the debts are not repaid. This may also be due to the fact that the interest burden is therefore too high. As is the case with many large online stores that offer their customers an installment purchase option. But if you use this payment option, you sometimes pay up to a third more. This was the result of a sample analysis from the Verivox comparison portal. According to this, for the installment financing of an online purchase of 5000 euros with a duration of 4 years, interest of almost 1600 euros is due above. The cost of a low-cost bank loan would be 1,300 euros less.

Interest rate of 15.31 percent

For the analysis, the standard conditions for installment financing at the three online retailers with the highest sales, Amazon, Otto and MMS E-Commerce (mediamarkt.de and saturn.de) were assessed. For an installment purchase on standard terms, consumers pay between 7.69% and 15.31% interest at the three retailers. This makes purchasing up to 32% more expensive. This was the result of the calculations for two model loans. With the purchase of the first installment, a purchase value of 2500 euros is financed over a two-year period. With the financing of the second installment, a purchase of 5,000 euros is extinguished over a period of 4 years.

Financing costs are higher in Otto. The installment financing of the 2500 euro purchase has a total interest of almost 390 euro. At an interest rate of 15.31 percent. Customers pay 15.2% interest here for 4-year installment financing. With a value of goods of 5,000 euros, this translates into additional costs totaling 1587 euros.

Compare and save

Media Markt and Saturn online store customers pay 8.49 percent interest for both financing models. For the purchase of 5000 euros, this entails additional costs for a total of 879 euros, with installment financing of the purchase with a value of the goods of 2500 euros, the interest expense adds up to 218 euros. Amazon customers can finance the same amount at an interest rate of 7.69% and would pay a total of € 198 in interest over 2 years. For the 5,000-euro purchase, however, they would have to switch to another payment option. Amazon only offers installment financing for purchases up to 3000 euros.

“Although installment financing directly via the reseller is convenient for customers, it is often very expensive and inflexible,” says Oliver Maier, managing director of Verivox Finanzvergleich GmbH. “In particular, consumers can finance the needs of larger consumers much cheaper with a retailer-independent bank loan.” The economic banks grant an installment loan of 5,000 euros with a duration of 4 years at a fixed rate of 2.28 per cent, independent of creditworthiness.

If you’re looking for the best installment loans without residual debt insurance, you’ll find them on ntv’s comparison calculators.

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