The 2/3 interest rate is a flop: with a bit of creativity, banks can continue to attract lock-in rates, which in practice only a small part of the clientele actually receives.
Overall, the benefits of the Consumer Credit Directive from 2010 for borrowers appear manageable.
The 2/3 interest rate, also referred to as the repre- sentative interest rate, has been mandatory since June 2010 for banks offering loans to consumers with credit-based conditions. The interest rate should actually be available to 2/3 of the borrowers and thus prevent decoy advertising.
How does the 2/3 interest rate come about?
If a bank wants to advertise with as low a 2/3 interest rate as possible, it must ensure that very interest-bearing loans flow into the calculation of the interest rate. With a little creativity, this can be done without much investment. Banks could cooperate with, for example, car dealers, commodity shops or electronics stores. These companies often encourage the sale of their products through installments at low or no interest rates.
The loans are granted by banks on standard terms and subsidized by dealers. The dealer’s payment to the bank is not included in the 2/3 interest rate, unlike the cross-subsidized effective rate. In this way arithmetic means as well as medians can be shifted.
The details of the application process for online loans may also conceal actions of this nature. In the calculation of the 2/3 interest rate, only applications that are actually submitted are included. Banks can design the application forms on the Internet in such a way that it is not possible to submit applications to many potential creditors. For example, temporary workers, low paid workers, etc. can be excluded. The average application quality can be selected with such a preselection raise. The 2/3 interest rate then refers to a population that is limited by the usual amount and loses its validity.
Credit comparison remains the only useful help
Consumers can switch to loans with non-cash interest rates, which are currently giving a favorable picture in the market comparison and treating all customers equally. Where there are measurable differences in creditworthiness between borrowers, however, a single interest rate leads predominantly to losers.
Banks draw the red line in their calculation with the borrower, which just meets the requirements for a loan payment at the applied interest rate. Those with poorer credit ratings will be refused, while those with better creditworthiness may pay too much for their credit. The only reliable help in finding a cheap loan remains a qualified loan comparison that consumers can either tackle themselves or leave to a mediator.