According to a recent survey by Spin Lender financial market research, many Germans plan to buy new furniture, electrical appliances or larger household appliances this year – in principle this is not a surprising study result. In comparison to the previous year, however, the Germans tend to finance this purchase much more by means of a bank loan.
Who currently lacks the necessary money to buy furniture or larger household appliances opens up three options for action: The consumer can either start saving the amount of money required, pay via the overdraft facility of the checking account or bridge the financial bottleneck with the installment loan from a bank.
Avoid financing the purchase of furniture with overdrafts
Since interest rates for savings, such as overnight or fixed-term deposit accounts, are currently at an all-time low and often do not even compensate for inflation, it would take a long time to save the amount of money needed – reacting to current special offers from furniture retailers is also an option not possible.
Consumers should continue to avoid urgently financing the purchase with the expensive overdraft facility – especially if the overdraft amount cannot be offset in the very near future. Banks charge very high interest rates for overdrafting the current account – as a rule, the fee is a multiple of normal loan interest. Since no repayment plan is agreed with the bank when using the overdraft facility, there is a very high likelihood that the consumer will use the overdraft facility longer than is actually necessary – this also increases the interest payments due.
Pay for furniture purchase cheaply with a small loan
To finance a furniture purchase through a bank loan, it is usually worthwhile for consumers to take out a so-called small loan. Essentially, these loans differ only in a lower loan amount of a maximum of 5,000 USD and the resulting shorter term.
Such a small loan of USD 1,000 with a term of 12 months can currently be taken out by consumers via an independent comparison portal on the Internet from an effective annual interest rate of 2.74 percent: Each month, the furniture buyer then only pays the bank just under USD 85 back, altogether interest costs of only 15 USD are due for this loan. For a long time now, you can no longer take out a cheaper loan to buy furniture from a bank – so what are you waiting for? Treat your apartment to a new coat of paint this spring with new furnishings for your own four walls.