Who does not know: A loan is needed due to a special situation. One informs oneself on the Internet by means of a credit comparison over suitable credit offers. These are matched with your own requirements and ultimately the decision for a specific loan offer is made. So the application process is initiated and at some point an insurance offer appears: the so-called residual debt insurance. The explanation of why such insurance is highly appropriate is then also included. Because you should take over the agreed installment payments to pay off the installment loan , even if you are no longer able to do so as a borrower. For example, in the case of job loss, prolonged illness and associated loss of earnings or as a result of premature death. So makes sense to accept the offer for the conclusion of a residual debt insurance ? Not necessarily and that has cost reasons first of all.
Remaining debt insurance: How expensive is the loan?
Basically, the hedging of financial risks, which undoubtedly includes a loan and the resulting long-term obligations, is recommended. However, this security is never in vain, and that is exactly where the residual debt insurance for credit is the danger. Because they make a originally favorable credit on closer inspection significantly more expensive. After all , the costs of the residual debt insurance are NOT priced into the APR of the installment loan . The reason for this is as follows: The insurance premium is usually paid as a lump sum, including all other additional costs, as a lump sum at the beginning of the contract. A procedure that can be interpreted as a concealment of the actual cost of credit. – and also should. For example, experts’ independent credit calculations show that this approach results in the real interest charge on the loan taken up doubling. Obviously, consumer advocates again and again criticize the lack of transparency of this debt insurance massive publicly and advise against the conclusion of such insurance in all clarity.
The legislator intervenes in the residual debt insurance
This constant criticism on the part of the consumer estimator has finally also found itself in the legislature and caused a corresponding reaction. This reaction is now reflected in a corresponding bill. The core of this draft is that banks have to send the customer another written notice of cancellation within seven days of signing the loan agreement. The content of this cancellation policy must be the exact listing of the conditions of that residual debt insurance and the entire loan. In addition to the anyway necessary reference to the right of withdrawal, which is valid as of receipt of the letter another 14 days. The aim of the legislator is to use this requirement to create a legally binding regulation of residual debt insurance for the protection of the consumer. Because so far, there is in the residual debt insurance compared to other insurance just not those statutory regulation. Until now, banks are not subject to comprehensive, regulated information obligations when offering a residual debt insurance .
Well thought, poorly implemented? Consumer advocates remain critical
Although the right of withdrawal and the obligation of the banks on the part of the consumer advocates is welcomed in the core, so there are two main points of criticism:
1.) the cost of insurance
Again, for good reason, because the amount and structure of the fees for a residual debt insurance, the new law will change nothing.
2.) The transparency
Transparency will only be created after the conclusion of the contract if the customer receives the cancellation policy. It would be significantly better and, above all, more consumer-friendly if the loan offer were already informed in detail about the effective annual interest rate with and without insurance.