Study confirms: Online payday loans are cheaper than in-store loans
A study by the USA Institute for service quality – in short: DISQ – confirms what has been regarded as a subjective finding among potential borrowers: online loans are often cheaper than loans concluded in the branch. This, in the context of the study, the knowledge and insight gained applies not only to installment loans from direct banks, but also credit the so-called branch banks. This was the result of the USA Institute for Service quality (DISQ). On behalf of n-tv, this company has tested the terms and consulting services for installment loans from 25 usa branch banks. This shows that, particularly with regard to the effective annual interest rates for a loan, substantial interest margins are possible. For a loan of 5,000 dollars, the banks surveyed by DISQ demanded annual effective interest rates of between 4,12 and 8,99 percent per year.
Credit on the Internet usually significantly cheaper
Especially at one point surprised the result of the DISQ study. The branch banks surveyed offered significantly lower interest rates in their website for the same loan than in the bank’s branch. According to the market research institute, customers of the tested Money Houses receive an online loan on average with an annual percentage rate of around 5.36 percent. The same credit is completed by the loan prospective customers in the local branch, the average interest rate for store credit then with 6.67 percent per year to a quarter of higher – mind you: in the same conditions! It is therefore close to the conclusion that as a credit customer for a branch Credit One has to pay a possible personal consultation by an employee in the bank branch with a correspondingly higher interest rate. What is basically acceptable and many credit customers would be willing to accept financially even without corresponding opposition. Provided that so then, in accordance with a quality credit counseling at an in-store credit is guaranteed by eìnen employees. For personal advice, borrowers therefore have to pay more. For many, this is fine − as long as the quality is right. However, even on this point, the testers of the DISQ have found considerable deficits in the financial institutions tested.
Quality of advice on loans is only “satisfactory”
Overall, the assessment of the banks quality of advice on loans is relatively modest. Overall, this means that from the perspective of the DISQ, this quality of advice of financial institutions can only be assessed as “satisfactory”. One of the shortcomings identified in personal advice is that the customer’s individual needs were often only superficially identified by the bank advisers. Another point of criticism is the mediation of the so-called residual debt insurance, because in almost one in ten consulting customers felt compelled to conclude such a contract. Consumers have been recommending for years to take out a residual liability insurance directly with the Bank, as these are often too expensive and are not always customer-friendly in terms of terms. On the other hand, as a positive factor in the local advisory services, DISQ found that no Bank made a credit request, but merely made a neutral condition request to credit score. It does not negatively affect the customer’s Score. The complete DISQ study is available here.