Even a 20,000 USD loan does not have to be expensive – effective interest rates of 4.29% are realistic. For example, the Creambank offers such low interest rates. A prerequisite for this is a term of 48 months and a top credit rating. However, the practice does not look much worse for the vast majority of customers: 2/3 of the customers receive an interest rate of 4.99%. The possible maximum interest rate of 10.99% is quite high. For a USD 20,000 loan, this would mean that USD 22055.71 would have to be repaid at the end of the term, at a monthly rate of USD 459.49.
Rates of online credit
Online credit delivers a no less interesting offer. With interest rates between 4.35% and 10.9%, the range can be compared to the Creambank. If the debtor has a very high creditworthiness, low interest rates are conceivable.
Only this seems to apply to comparatively few customers: because in fact, 6.5% interest is due for most borrowers. Of course, this includes the 3% processing fee. In practical terms, this means that Online credit only classifies the smallest proportion of borrowers as really safe. 48 monthly installments of USD 472.59 are repaid, resulting in a total of USD 22,684.11.
The Cream Bank is even more expensive. The 20,000 USD loan has a term of 48 months with 7.95% interest from the majority of debtors. The monthly installments drive this to 485.21 USD. Actually, however, effective annual interest rates of 4.4% or more are apparently seldom actually assigned. At the end of the assumed interest rate, this loan costs 3,289.88 USD.
Banks assess the overall financial situation
In order to keep the APR as low as possible, a high creditworthiness of the debtor is a prerequisite. The banks look at the overall financial situation of the debtor. Not only is income important, the cost side is also highlighted. Those who are obliged to support many people actually have less money to repay a 20,000 USD loan. Even those who are already repaying some loans must expect to pay a higher interest rate for the new loan.
This applies even if the loans are all serviced regularly. On the other hand, income that is not part of the employment relationship is also taken into account. So if there is capital income or rental income, this significantly improves the prospects for a loan.
On the other hand, if you have a negative entry at Credit Bureau due to a failure to repay, the chances of getting a 20,000 USD loan are rather poor. Age is also important: Loans are usually granted between the ages of 18 and around 60. The upper limit differs for the banks, however, the financial situation and possible collateral are also likely to play a role.