Credit Cost
An applicant for the credit receives credit with the obligation to pay the borrowed amount back plus interest at the agreed upon time. The interest is indicated as a rule as annual interest and in per cent per annum (“% per annum”). For security and arrangement credits usually however no repayment mode is intended, the interest the debt is simply in addition-booked here.
There are also interest-free loans - particularly for operating establishments and publicly promoted building projects. In the context of different advancement programs of the European community, the federation, the countries or the municipalities also interest subsidies or interest reducing can be taken up by the applicant for the credit.
The interest rate realigns itself above all
- the running time of the credit
- the interest connection period, which is shorter usually than the credit period. Here one differentiates
- Variable loan
- Fixed interest loan
- Cap loan
- Floor loan
the soil quality (credit-worthiness) of the applicant for the credit,
the collateral posed,
the momentary and the expected interest rate level.
In smaller measure the interest rate affected of the general economic situation of the state concerned
- and/or - with foreign currency credits - that state, to whose currency the credit is taken up, and The planned project, for which the credit is to be used.
Additional expenses of the credit can consist as a function of the credit agreement of the following components:
Before granting of credit
- Disagien
- Costs of the position of collateral (e.g. notary or land register costs)
- Costs of the evaluation of collateral (e.g. consultant costs)
- Handling charges (e.g. with the installment credit (*)
- Restschuldversicherung
- Supply interest.
During the current credit
- Credit commission
On completion of the credit agreement
- Vorfälligkeitsentschädigung
- Costs of the release of collateral (e.g. notary or land register costs)
- Handling charges, so far permissible.
Note: Not all of these costs are contained in the effective interest.