# Current loan interest rates 2020

The following applies to lend rates in 2019: the best rates are still at a low level. According to the Good Credit’s interest rate statistics, the average effective interest rate for consumer loans was 5.66% in April 2018.

This means that it is currently relatively cheap for customers to take out a loan. The following tables show some examples of loans popular in Germany. These are classic installment loans, car loans, and a small loan.

## Current top loan rate

0.68% Representative example according to Good Finance: net loan amount $ 10,000, 84 months term, effective annual interest rate 4.24%, fixed interest rate 4.16%, processing fee none, total amount $ 11,543.68, Good Credit, as of August 16, 2019

Are you looking for the current cheapest loan rate? Use our installment loan comparison and compare several loan offers.

Compare loan interest rates

### What is the current interest rate on an installment loan?

More than one in four adults currently use an installment loan. The Society for Consumer Research found out. In order to give you an idea of the current interest on a loan, we have calculated a low, a medium and a high effective interest rate for the loan amount of $ 10,000 with different terms. In all cases, the aforementioned loan interest rates reflect the best offers that two-thirds of all customers actually receive.

## Current loan interest on a classic installment loan of $ 10,000

The example of the loan with a term of 84 months shows how different the loan costs are that you have to pay during the 7 years because of the higher interest rate. With a low effective interest rate, the loan costs around $ 1,120, with a high effective interest rate of over $ 4,100.

### These are the current interest rates for a car loan

More than half (58%) of all loans in Germany are taken out for the purchase of a car. In this table, we have presented the best offers that two-thirds of all customers receive when comparing a car loan. You can clearly see a large spread between low and high-interest rates, the difference is about 8%!

### Current loan interest rates for car loans of different levels

The good eight percent difference in the effective interest rate is reflected in the credit costs. The new car loan with the low interest costs you around $ 890. With a high effective interest rate, you pay over $ 4,100 for the loan. That is more than four times!

## That is the amount of the loan interest for a small loan

In 2016, according to Credit Checker Credit Compass, 37.9% of all new financing deals were small loans of up to $ 3,000. When comparing interest rates, there are big differences between low and high-interest rates. About the same extent as for installment and car loans. The table shows the best lending rates that two-thirds of all customers are really offered.

### Current interest on a small loan

With the low-interest rate, you have loan costs of around $ 20 during the term. With the high effective interest rate, costs of $ 52 arise, almost three times as much!

## What are loan rates?

Loan interest rates determine the price you have to pay for borrowed money. If you take out a loan from a bank or privately, the lender usually wants to earn money from it. So not only do you have to pay back the loan amount, but you also have to top it off. That is the interest on a loan.

They are given as a percentage of the loan amount. The term interest rate is also often used. In most cases, the loan interest is paid in monthly installments over a certain term, which is determined before the loan agreement is concluded. These are the interest costs in euros.

### What types of loan interest are there?

In the case of a loan offer, two interest rates are always mentioned. On the one hand the borrowing rate and on the other hand the effective interest rate. That is the difference.

### What is the borrowing rate?

The borrowing rate indicates the amount of interest that must be paid purely for the provision of the loan amount. It forms the basis for calculating loan interest. Until the introduction of the consumer credit directive in 2010, the term nominal interest rate was used for this. However, the borrowing rate does not include any additional costs that arise when a loan is granted and that make the loan more expensive.

### What is an effective interest rate?

The effective interest rate, also called the annual percentage rate, contains the additional costs incurred in addition to the borrowing rate. These are, for example, expenses of the credit institutions for the administration or for the creation of documents.

The effective interest rate thus describes the total costs actually incurred and is higher than the target interest rate. The effective interest rate is, therefore, more suitable for comparing interest rates on loans.