Why our credit interest is lower than at the major banks
At Snaploan Online we regularly get the question: 'you offer the lowest interest on loans, how is that possible? Other providers such as the major banks (ABN Amro, ING and Rabobank) are much more expensive. Is there a catch with you? '.
We can well imagine this question. After all, consumers are still used to high interest rates from the (recent) past. Many people are also still tied to credit providers who work with interest rates of up to 14% on an annual basis , such as buying on installment at Wehkamp . More and more consumers are realizing that this is usurious interest where you should stay away from. But the other extreme (low interest rates like ours, from 3.5%) also raises questions.
The difference in interest rates with traditional large banks is also clearly visible on our comparison page . As an example: a personal loan of US $ 50,000 with a term of 5 years is already possible with us from 3.5% interest. At the cheapest major bank (ABN Amro), the lowest interest rate for exactly the same loan is 4.2% on an annual basis.
1. Specialism in consumer credit
To begin with, Snaploan Online specializes in consumer credit. This means that we offer personal loans and revolving credit, and nothing else. But we know all about that. We have in-house specialists who can write a book about consumer credit, but who do not have to delve too much into other financial topics such as mortgages or investments. That reduces costs.
Together we have decades of in-house knowledge and experience with consumer credit and we continue to increase and update our knowledge every day.
The master shows itself in restriction and our customers benefit from it.
2. Execution only
We offer loans, but no advice. You cannot therefore request a consultation with one of our specialists. That seems irresponsible, but the opposite is true. People who take out a loan with us must already have some knowledge about and experience with borrowing money.
We know from experience that customers themselves know exactly what they want; we help them with a website with a lot of product information, a
Clear quote page and request page to get through the process.
We do think along, but do not conduct complete advisory discussions.
I liked the communication very much. It was easy to arrange and the emails we received were clear and took us through the application process.
- EM via Trustpilot.nl
You don't have to, because our inquiry page is so clearly laid out that customers are automatically guided through the process. You arrange everything online yourself and the application process is short and clear. If there are any questions, our specialists are ready to help. Online or by phone.
This approach means that we do not have to charge consultancy costs or commission costs for advisers and because the customer cooperates, our (process) costs are lower than at the banks.
We can continue to work 100% online and that makes a huge difference in costs. The Nederlandse Kredietmaatschappij has 1 office building; otherwise no extensive network of bank branches and offices.
In summary: we demand a little more from our customer, set the bar a bit higher in the start-up phase and can therefore ultimately keep costs lower. This is reflected in the low interest rates. Moreover, we are faster: an appointment does not have to be made first, but you can start immediately and after approval you will have your money within 2 working days. Fast, flawless and cheap.
You can read more information about the difference between execution only and advisory meetings in this previous article.
3. Responsible borrowing: limited risks
We often talk about it: borrowing responsibly . Borrowing money responsibly means that you can only take out a loan if your personal and financial situation shows that you can bear the burden of repayment and interest. We therefore request your financial data such as salary slips or annual reports from self-employed persons / entrepreneurs.
There are also legal provisions and borrowing standards associated with responsible borrowing, as are checks on (negative) BKR registrations .
You can imagine that all these checks together provide a realistic picture of the capacity of customers. We also see this in practice: 98% of our customers pay without any problems. For us as a credit provider, this means a minimal risk. And such a low risk ensures that we can limit the costs for our customers.
Conclusion: a decent interest rate without any strings attached
It is therefore possible to offer a low interest rate with good conditions that cause people as little trouble as possible.
So we should actually turn the question around: why do major banks, mail order companies and other credit providers still use such a high interest rate?