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Consumer loan
Krediteab 9 J.
A loan for consumer goods (phone, TV, holiday). Considered a “bad loan” because the things you buy lose value.
A consumer loan finances things you really shouldn't buy on credit: smartphones, TVs, furniture, holidays or clothes. The problem: these things lose value immediately, while you keep paying instalments plus interest for years.
Example: a €1,200 smartphone in 24 monthly instalments at an 8% effective rate costs you approx. €1,300 in total. And in 2 years the phone is only worth €300.
Better alternative: save up the amount and pay cash. At €100/month you'll have enough after 12 months – and save yourself the €100 in interest. If you can't pay for it in cash, you can't afford it.
Did you know? At the end of 2023, consumer loans totalling around €234 billion were outstanding in Germany – while 5.56 million people were over-indebted.
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