The decline in bank branches in Germany is making it more difficult for consumers to compare loan offers from different banks locally. This is problematic because interest rates can vary depending on the bank. A lack of comparison of loan offers leads to unnecessarily high interest charges.

The number of bank branches in Germany is constantly decreasing. According to the most recently published figures from the Bundesbank, there were a good quarter (26.9 percent) fewer bank branches in 2023 than in 2019, which, with 7,166 branches no longer available, represents a challenge for daily banking business. While cash can be collected at the supermarket checkout, there is no need for other counter transactions or a personal conversation with an on-site advisor.

This development makes it increasingly difficult, especially for private individuals, to obtain and compare loan offers from different banks. This can be expensive for borrowers because “how much interest you have to pay on a loan also depends heavily on which bank you go to. The wrong decision can quickly cost you several hundred or thousand euros,” explains Alexander Artopé, managing director of Smava, a comparison portal for loan offers.

Current data from Smava shows: While the Bundesbank reports an average national interest rate of just under nine percent for a consumer loan, there are significantly cheaper options with interest rates of sometimes six percent or less. The variance in interest rates depends not only on the individual creditworthiness, the loan amount, the term or the intended use, but also largely on the bank chosen.

A recent survey shows that 41.7 percent of banks surveyed want to reduce interest rates on new loans in the next three months, while 58.3 percent want to leave interest rates unchanged. This is likely to further increase the existing interest rate differences between banks. Comparing the different offers from banks is therefore essential if you don’t want to pay too much for your own loan.

To the FOCUS online installment loan comparison

To illustrate the savings potential, the following sample calculations compare different effective annual interest rates for loans of 5,000 euros, 10,000 euros and 30,000 euros with different terms. The calculations show how important the comparison is, as potential savings of over 7,000 euros are possible.

For meaningful loan comparisons, the applicant’s individual information such as regular income and current expenses must be taken into account. Online tools that only ask about the desired loan amount, term and intended use can be misleading as they often show the best possible interest rate, which does not necessarily correspond to the actual interest rate offered. For an accurate comparison, providing personal information is essential. Online platforms request this information to create personalized loan offers and ensure transparency and accuracy when comparing interest rates.

To the FOCUS online installment loan comparison