Why do people finance everything

Zero percent financing: background, pitfalls, advantages and disadvantages

"Zero percent financing" does not necessarily mean that the conclusion of the contract must be free of charge or particularly cheap for the consumer. There are often hidden traps lurking in such offers:

Keep an eye out for additional residual debt insurance, credit default insurance or installment protection insurance

Under these and similar terms, supposedly indispensable protection is sold, which is supposed to cover problems with payment in installments. Often, the conclusion of these contracts is already preset by the financing bank. Since the insurance companies often do not pay when they are needed due to numerous exceptions, but at the same time they are expensive, it is usually not recommended to take out insurance. Consumers can refuse to conclude such additional business.

Beware of hidden additional costs

Even if there is no interest, sometimes additional fees, for example for account management, hide in the small print. With regard to the more recent case law on processing fees and charges, one should question whether these could be agreed at all. If the institute claims costs that are part of the "loan price" according to the Price Indication Ordinance - for example, agency costs known to the lender - they must be shown in the "annual percentage rate" - as the actual price of a loan.

Attention, dispo trap

You can probably only manage the installment payments by you use your overdraft facility more often, the supposed 0% interest quickly turns into expensive fun. Therefore, even a low installment obligation should be well thought out in advance.

Be careful with additional (undesired) credit lines

It is not uncommon for an additional credit line to be agreed automatically with "zero percent financing" and without explanatory advice, sometimes hidden in the small print: Similar to an overdraft facility, only separate from the current account, the bank provides a credit line that is usually provided by the consumer Can be used with a Maestro or credit card.