You’ve received a tempting offer for a loan? Find out whether the offer is a serious one, and whether it matches your personal means and requirements!
1. Do I really need the loan?
A loan comes with obligations and should therefore only be taken out where absolutely necessary. Can you also achieve your desired objective by saving up and paying the amount in one go? Look for alternatives
2. Am I able to make regular repayments?
Do you have adequate financial reserves in order to keep up with repayments even in the event that your circumstances change? Or are your monthly outgoings higher than your income once you take out the loan? This can be the first step towards overindebtedness. Compare your income in advance against your future fixed costs!
3. Have I also contacted other providers?
There are plenty of providers and lending models in the Austrian financial market. Always get several offers, and compare both the interest rates as well as the other loan conditions. These might for example include the term of the loan, repayment modalities and potential special repayment options.
4. Effective annual interest rate – what is the true cost of the loan?
The effective annual interest rate shows how much the loan really costs. It consists of all additional costs and fees and should be used as a basis for being able to compare several offers. Ask for a complete draft version of the credit agreement and a clear overview about the repayment instalments!
5. Have I tried to negotiate better conditions?
Contact the lenders either online or in person! It is often possible to negotiate better conditions on a loan. You have room for negotiation especially if you have passed the credit rating check and are deemed to be creditworthy. Ask – it can be really worthwhile!
6. Am I adequately protected against fraud?
Always check the integrity of the provider. Various sources of information exist, like the FMA Company Database and the Gewerbeinformationssystem Austria (GISA). Often even just checking the website or search for reviews can be very enlightening. Beware of unexpected offers – if in doubt, steer clear of dubious providers.
7. Should I transfer money in advance to obtain a loan?
Attention! You will never be asked to make an advanced payment for a serious loan! Never pay processing fees, taxes or similar charges up front. Even in the case that you are promised a high loan amount by doing so.
The transferred money will be lost, and you will also not obtain a loan.
Tips
AK Bankenrechner:
The AK Bankenrechner (the Arbeiterkammer’s banking services comparison tool) helps to you compare various loan offers quickly and simply > ak-bankenrechner.at/privatkredit
Geld-Wörterbuch:
This “Dictionary of Money” explains difficult financial terms about money in simple terms. It can be found on the financial literacy portal of officially recognised debt counselling services (in German only) > finanzbildungsportal.at/geld-woerterbuch
This edition was written in cooperation with Austria’s debt counselling services.
Other editions:
15 Interest rates on loans
20 Housing loans
25 Payment deferral
A to Z of Finance:
You can find further details on the A to Z of Finance section of our website.
FMA Company Database:
Here you can find on all banks that are allowed to grant loans in Austria.
Gewerbeinformationssystem GISA:
Credit intermediaries’ authorisation to trade can be checked at www.gisa.gv.at.
Credit rating check:
Check conducted about the level of probability of a person being able to meet their financial obligations both promptly and fully.