In short, a credit for free use means an installment loan with no purpose limitation. If you plan to take out a loan, the bank often asks first about the purpose. With this, she wants to find out whether there is any collateral for the loan. For example, this can be your own home for a real estate loan or the vehicle for a car loan. In order to then receive this loan, you must prove the intended use. If, on the other hand, you have opted for an installment loan without a purpose, you can decide for yourself what you want to use the money for: for example, for the long-awaited vacation, a new TV or chic furniture.
Unrestricted credit: the benefits
A loan that focuses on free use has the same advantages as any consumer loan. There is, for example, the ability to plan, because with an installment loan, the interest rate remains the same over the entire term. Since the rate you pay to the bank every month also remains constant, you know exactly what costs you will have to pay. You also have the option of fulfilling your wishes even without your own reserves. However, there is one clear advantage that a free-use loan has over a purpose-built loan: you do not have to specify a purpose and therefore do not have to provide security evidence. Only your household budget and your income influence the desired loan amount. So you can use the installment loan for whatever you want.
Better interest rates if you specify the purpose of the loan
If you want to save, you should check whether a loan with a earmarked purpose is better suited to your request. This usually offers lower interest rates than a non-earmarked loan because the purchased item serves as security for the bank, which you can attach if you are unable to service the loan. If you want to buy a car, for example, you should use a special car loan: For this you have to present the purchase contract to the bank as proof of use and in return receive a cheaper interest rate for the financing.
In order to bring your home up to scratch, you can use a modernization loan or a home loan. This holds particularly low interest rates for property owners. In order to be able to enjoy them, you must provide a land register extract as proof that you also own the property. While proof of use must be provided for a building loan, this is not always the case for a modernization loan. Some banks require the submission of an action plan as proof of use, while others want to see the invoices of the craft businesses. At some banks, however, it is also possible to take out a modernization loan without proof of use – then all you have to do is submit an extract from the land register.
Incidentally, debt rescheduling can also be used for a loan: You can use it to combine existing loans into a single one and thus benefit from a lower interest rate.
Calculate interest on a non-earmarked loan
If you want to take out a loan without proof of use, you should do one thing above all: compare. Because every bank offers different conditions. The most important comparison criteria are the annual percentage rate and the term. You can use our installment loan calculator to find out what costs you have to expect and how much the monthly charge would be. If you would like an individual offer for a loan with free use, our installment loan specialists will help you with a personal consultation. In it we go into your current life situation and compare the interest rates of relevant banks for you free of charge. You will then receive a non-binding proposal for a loan offer from us.