- The time for cheap credit is over: loan interest rates are already over
By up to 1.5 percentage points
- Blicker expert Martin Spona anticipates up to three price increases throughout the year
- Every seventh household finances fixed costs with an installment loan or an overdraft – every sixth finds it difficult to obtain a consumer loan
After rising prices and a continuous loss of income as a result of the Corona pandemic and the Ukraine war, fixed costs can now become a debt trap for a growing number of Austrian families. The reason for this is that loans are now more expensive and at the same time more difficult to obtain. According to the Tariff Comparison Portal, bank lending rates have recently increased by as much as 1.5 percentage points. Martin Spona, head of consumer finance at durchblicker, expects one to three more rate hikes in Austria by the end of the year.
According to a survey in which durchblicker questioned 1,200 Austrian families in April[](#_ftn1), 12 percent reported that they could no longer cover their fixed costs. In detail, one in seven households currently finances their fixed costs with an installment loan or overdraft, one in six finds it difficult to obtain a loan, and nearly one in eight households can no longer afford a loan.
The situation could become increasingly precarious for these families – especially if lending rates rise or the bank cancels its overdraft facility. Covering fixed costs by overdraft should only be a short-term solution. If loans, as now, are rapidly increasing in cost, fixed costs can quickly turn into a debt trap,” warns Spona expert at durchblicker.
Only use consumer credit for unexpected expenses
The transparent expert recommends families in a precarious situation to only borrow from the bank to cover unplanned expenses such as expensive car repairs or the purchase of expensive household appliances. In these cases, Spona also recommends taking out a consumer loan rather than using an overdraft facility.
A consumer loan is usually a much cheaper alternative to overdrafting an account over a longer period of time. Depending on the bank, between 6 and 13 percent debit interest is charged on an overdraft. For a consumer loan at a variable interest rate including all additional fees, you currently pay an average of 4.86%, with an average fixed interest rate of 5.25% in effect.
Online loans are often processed by banks in a very short time. Payment is usually made a few business days after confirmation. Depending on creditworthiness and affordability, interest rates fluctuate greatly. Online comparison of individual offers available for free can be done in just a few steps at
If you need financing, it is better not to wait and get a fixed-rate loan
If you already know that you will need a consumer loan in the near future, it is best not to wait too long due to the interest rate trend and get a fixed rate loan as soon as possible. “The era of cheap credit is definitely over. Interest rates will continue to rise in the coming months because the costs of bank refinancing will go up. In addition, the banks will check closely whether families can afford the loan at all. Because the rising cost of living,” says Spona. The current situation also deteriorates family budgets.”
With the highest rate hike in 22 years, the US Federal Reserve raised its key interest rate by half a percentage point to a range of 0.75 and 1 percent at the beginning of May. The European Central Bank raised the possibility of a rate hike in July.
Home loans are more difficult to get than summer
New lending guidelines for mortgage loans in Austria will also apply from summer:
20 percent of the equity will be mandatory, and the loan installment may not exceed 40 percent of the net family
Income, term limited to a maximum of 35 years. Therefore, if you want to get a loan to build a house or apartment in the future, you have to earn enough money and bring a lot of savings with you.
above[ durchblicker] (http://durchblicker.at/)
[durchblicker] (https://durchblicker.at/) is the largest independent online tariff comparison portal in Austria and a member of the Netrisk Group, a network of leading comparison portals in Central and Eastern Europe. Currently applying [durchblicker] (https://durchblicker.at/) 28 Introductory comparison of insurance, telecommunications, electricity and gas, as well as traditional financial products such as loans, checking accounts and savings interest. With our easy-to-use comparison calculator, consumers can find a quick market overview and individual offers that are reliable and accurate. Thanks to a quick and easy online contract, several thousand euros can be saved in fixed costs each year. Offers [durchblicker] (https://durchblicker.at/) Free expert advice and also switch to a cheaper provider.
The Austrian market leader among tariff comparison portals, headquartered in Vienna, currently employs more than 85 employees. durchblicker partners are Global 2000 and klimaaktiv as well [topprodukte.at] (http://topprodukte.at) The Austrian Football League.
More information at [www.durchblicker.at] (http://www.durchblicker.at).
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[](#_ftnref1) Survey by responsei AG, n = 1,200, representative population of male and female patients aged 18 years and over, survey period: 6-11 April 2022